OBR slashes UK growth forecast for 2025 but upgrades it for rest of parliament, chancellor says
The Office for Budget Responsibility has halved the UK growth forecast for 2025 from 2% to 1%, Chancellor Rachel Reeves has said.
However, the fiscal watchdog said that while growth has been downgraded for this year, it had been upgraded for every year after for the rest of this parliament – which is due to end in 2029.
The chancellor said she is “not satisfied with the numbers” for this year as she delivered her long-awaited spring statement in the House of Commons this afternoon.
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But, she explained, the OBR has forecast growth to hit 1.9% in 2026, 1.8% in 2027, 1.7% in 2028, and 1.8% in 2029.
She told MPs: “There are no shortcuts to economic growth. It will take long-term decisions. It will take hard yards. It will take time for the reforms we are introducing to be felt in the every day economy.
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Rachel Reeves has confirmed that the OBR has downgraded the UK’s economic growth forecast for this year from 2% to 1%.
“It is right that the Office for Budget Responsibility consider the evidence and look carefully at measures before recognising a growth impact in their forecast.”
The chancellor pointed to changes to the National Planning Policy Framework, saying mandatory housing targets and bringing “grey belt” land into scope for development will “permanently increase the level of real GDP by 0.2% by 2029-30”.
This will bring an “additional £6.8bn in our economy and by 0.4% of GDP within the next 10 years”, she said.
Ms Reeves also highlighted reforms to the pension system and a national wealth fund, adding it was part of a “serious plan” for economic growth.
Also announced in the spring statement today:
- The budget will move from a deficit of £36.1bn in 2025/26 and £13.4bn in 2026/27, to a surplus of £6bn in 2027/28, £7.1bn in 2028/29 and £9.9bn in 2029/30;
- The Office for Budget Responsibility estimates Labour’s cuts to the welfare budget will save £4.8bn, with changes going further than initially thought;
- Reeves says the health element of universal credit will be cut by half and frozen for new claimants;
- There are no more tax rises today, but the chancellor claims she’ll raise an extra billion pounds by cracking down more on tax evasion;
- Day-to-day spending will be protected, other than the aid budget, with spending increasing above inflation every year;
- The defence budget will get a £2.2bn boost for next year, paving the way for spending eventually hitting 2.5% of GDP;
- House building will hit a 40-year-high thanks to Labour’s planning reforms.
The chancellor confirmed that a voluntary redundancy scheme is set to launch for civil servants as part of her mission to “make government leaner”. She said this will deliver £3.5bn in “day-to-day savings by 2029-30”.
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Sky’s Economics and Data Editor Ed Conway goes through the latest economic data following the chancellor’s spring statement.
Shortly afterwards, Conservative leader Kemi Badenoch accused Labour of financial “chaos”.
She said the spring statement was “all smoke and mirrors”, adding: “I remember the last budget when Rachel Reeves said she was smashing glass ceilings, now it feels like the roof is falling over all our heads.”
A handful of Labour MPs were unimpressed with the moves around welfare, with Debbie Abrahams – the MP for Oldham East and Saddleworth – claiming “all the evidence points to cuts in welfare leading to severe poverty and worsened health conditions”.
An impact assessment into Labour’s welfare reforms, which include narrowing the eligibility criteria for personal independence payments (PIP), found there could be an additional 250,000 people in “relative poverty” by 2030 due to the changes.
Richard Burgon, the Labour MP for Leeds East, said “taking away the personal independence payments” from disabled people is an “especially cruel choice”.
The television production company founded by broadcaster Jake Humphrey and former racing driver David Coulthard is in talks with potential buyers about a sale.
Sky News has learnt that Whisper Group, which was established in 2010 and won a BAFTA for its coverage of the Women’s Euros in 2022, is working with advisers on a deal.
The company is said to be open to a range of options, including the sale of a majority or minority stake to either financial investors or a strategic buyer.
Corporate financiers at KPMG are orchestrating talks with potential bidders.
Whisper is already 30%-owned by Sony Pictures Television, which acquired the stake in 2020.
It replaced Channel 4’s Indie Growth Fund as an investor in the business.
A majority of the shares in Whisper are owned by its founders and management team.
Lioness Millie Bright celebrates England’s win at the Women’s Euros 2022, the coverage of which was produced by Whisper. File pic: Reuters
The company is best-known for its sports productions, and is responsible for Channel 4’s Formula One coverage as well as international cricket, boxing and the Paralympics.
Whisper employs about 300 people, and has operations in London, Cardiff, Manchester and Riyadh.
Its chief executive, Sunil Patel, co-founded the producer alongside Mr Coulthard and Mr Humphrey.
It is said to be plotting further expansion in sport in the form of bigger events and rightsholders, as well as in events, where its clients include Red Bull.
Whisper is also focused on growing its presence in the US, where it currently works with Tom Brady’s Religion of Sport, and the Middle East, where it is partnered with Neom and Saudi Pro League teams.
Outside of sports rights, it has produced documentaries about Ben Stokes, the England Test cricket captain, and Sven-Goran Eriksson, the late England football manager.
It has also diversified into entertainment programming, producing the Wheel of Fortune gameshow hosted by Graham Norton.
Its most recent accounts disclosed a £4.3m pre-tax profit for the year to March 31, 2024.
“Whisper has successful diversified into factual, entertainment and events to complement the wider blend of work across its sports broadcast contracts,” it said in a statement accompanying the accounts.
“It has been another successful year for contract wins, with a series of renewals with key clients and a new range of significant projects which will help ensure visibility over the next few years.”
The sale process comes as ITV holds talks about a merger of its Studios arm with RedBird IMI-owned All3Media, one of Britain’s biggest production companies.
A combination of the two businesses could be announced during the spring, according to banking sources.
This weekend, a spokesman for Whisper declined to comment.
Business
Port giant DP World ‘discredited’ by former minister despite £1bn investment in London Gateway
The chairman of P&O Ferries’ parent company DP World has told Sky News he went ahead with a £1bn investment in the UK despite feeling “discredited” by criticism from a cabinet minister.
P&O was widely criticised in 2022 when more than 700 seafarers were summarily fired and replaced by largely overseas workers without consultation.
Last October, the issue threatened DP World’s planned expansion of London Gateway, its deepwater port on the Thames Estuary, when the then transport secretary, Louise Haigh, described P&O as a “rogue operator”.
Her comments came as DP World was in the final stages of negotiating a £1bn investment in the port, due to be announced at the government’s investment summit.
Money blog: Trump car tariffs condemned around the world
In response, DP World pulled the announcement and only relented following a personal intervention by the prime minister to keep his showpiece event on course.
DP World chairman Sultan Ahmed Bin Sulayem
Speaking exclusively to Sky News, Sultan Ahmed Bin Sulayem said the criticism was unexpected given the scale of his planned investment in the UK.
‘Water under the bridge’
“There was a misunderstanding. Someone, unfortunately, said something that was not what we expected.
“We were going to invest in infrastructure, a huge investment, and then we get the person in charge to basically discredit us. But it’s water under the bridge.”
Bin Sulayem confirmed that he had spoken with the prime minister and received “reassurances” that Ms Haigh was expressing a personal view. She subsequently resigned after admitting a fraud offence.
The chairman also defended P&O’s conduct, saying that having received no state support during the pandemic, the cuts were necessary to save the company.
“We had a choice. We either close down the company and 3,000 people or more lose their jobs, or we try to survive by letting 700 or so go. And we felt that was right,” he said.
“Maybe we didn’t follow the procedures, but most importantly, we compensated every employee with more than what the law said.”
Read more from Sky News:
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Rebuilding relations
DP World’s London Gateway container port in Stanford-le-Hope, Essex. File pic: PA
Bin Sulayem was speaking on a flying visit to the UK intended to rebuild relations with the government, meeting investment minister Poppy Gustaffsen at London Gateway to discuss an expansion that will make the port Britain’s largest by volume and offering encouraging words about the UK’s attractiveness to investors.
“We believe in the UK economy, in its strength, and we believe the economic fundamentals are strong. That’s why we invested,” he said.
“The UK has the best stock market in the world. You have English law, and you have the best universities in Oxford and Cambridge. If we look to the future, it will be the economy of the brain, not the economy of the hand.
“The world economy doesn’t want labourers, it wants brains. People want engineers. They want free thinkers. They want innovators. That is what’s here, and that’s why we invested in London Gateway.”
Sky’s Paul Kelso with Bin Sulayem
Tariff trade trouble
With ports and logistics operations in more than 70 countries handling around 10% of global trade, DP World’s chairman has a unique insight into global trade and the likely impact of the tariff war sparked by Donald Trump.
While confident that trade will find a way to navigate the disruption, he warned America’s trading partners to take the president seriously.
“I think psychologically it will [have an impact], but in reality it will not, because trade is resilient. I think of it like water coming from the mountain in the rain, nobody can stop it. If you can’t sell a product in one place, you can sell it somewhere else.
“Trump is a deal maker. He is making threats because that’s the way he negotiates. He comes with impossible demands because he wants people to come to the table.
“But he’s serious. He will do what he’s threatening if nobody makes a deal.”
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