Rachel Reeves has delivered her much anticipated spring statement today.

The chancellor’s statement is not a formal budget – as Labour pledged to only deliver one per year – but rather an update on the economy and any progress since her fiscal statement last October.

Ms Reeves told MPs “the world has changed” since her first budget just under five months ago, and that was to blame for the string of cuts and downgrades she outlined in the Commons.

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But critics have said today’s update is a direct consequence of her decisions since taking office in July.

Here are the key takeaways from the spring statement:

The Office for Budget Responsibility (OBR) has halved the UK growth forecast for 2025 from 2% to 1%, Ms Reeves said, adding that she was “not satisfied with these numbers”.

She explained that the government’s 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.

While the short-term growth forecasts appear gloomy, the chancellor said the OBR predicts the economy will be “larger” by the end of the forecast compared with the time of her first budget as a result of her decisions.

The OBR expects output to grow 1% in 2025, by 1.9% next year, 1.8% in 2027, 1.7% in 2028 and by 1.8% in 2029.

On living standards, real household disposable income per person is expected to grow by an average of around 0.5 percentage points a year from 2025-26 to 2029-30, led by stronger wage growth and inflation starting to fall later in the forecast period.

Ms Reeves said disposable income will “grow this year at almost twice the rate expected in the autumn”, adding: “Households will be on average over £500 a year better off under this government.”

The chancellor announced further welfare cuts after being told the reforms announced last week will save less than planned – £3.4bn instead of £5bn.

Among the latest changes to welfare spending, Ms Reeves said the universal credit health element would be cut by 50% and frozen for new claimants rather than rising in line with inflation.

However, the universal credit standard allowance will increase from £92 per week in 2025-26 to £106 per week by 2029-30. The changes will mean a further 150,000 people will not receive carer’s allowance or the carer element of universal credit, according to the government’s own impact assessment.

The OBR has estimated the new welfare savings package will save £4.8bn.

Cuts to welfare will mean 250,000 more people – including 50,000 children – will be pushed into poverty by 2030, the government’s assessment predicts.

Separately, 800,000 people will not receive the daily living component personal independence payment (PIP) – due to tightening eligibility rules.

The chancellor pledged to “boost Britain’s defence industry and to make the UK a defence industrial superpower”.

She confirmed the government’s pledge to spend 2.5% of GDP by 2027.

The Ministry of Defence will get an additional £2.2bn next year, the chancellor said, which will be spent on new high-tech weaponry, upgrading HM Naval Base in Portsmouth, and refurbishing military family homes, among other things.

The commitment is fully funded, with cash coming from Treasury reserves and also from the decision to slash foreign aid funding.

Ms Reeves said the statement does not contain any further tax increases, but highlighted work that needs to be done to tackle tax evasion.

She announced steps to crack down on tax evasion, saying that the government will increase the number of tax fraudsters charged each year by 20%.

She says that reducing tax evasion will raise an extra £1bn for the economy.

On departmental budgets – which dictate how much different parts of government can spend until 2030 – Ms Reeves said she aims to make the state “leaner and more agile”.

The chancellor also confirmed that a voluntary redundancy scheme is set to launch for civil servants, saying this will deliver £3.5bn in “day-to-day savings by 2029-30”.

Government spending will now grow by an average of 1.2% a year above inflation, compared with 1.3% in the autumn.

Planning reforms will see house building reach a more than 40-year high by 2030, the chancellor said.

She said the OBR has forecast that the government’s reforms to cut planning red tape will boost house building by 170,000 over the next five years, to 305,000.

This would put the government on track to add around 1.3 million to Britain’s stock of homes in the UK, a rise of 16%, by the end of Parliament.

However, it will fall short of its initial target of 1.5 million houses, the OBR warned, adding that planning reforms will only increase the overall housing stock by 0.5% by the end of 2030.

How have the markets reacted?

The reaction of financial markets to a fiscal event is important, particularly as a poorly received speech can add to government borrowing costs on the bond markets.

The good news for the chancellor here is that yields – the premium demanded by investors to hold UK government debt – dipped slightly in the wake of her remarks.

The yield for UK 30-year bonds, known as gilts, eased by almost 0.1 percentage points to 5.283%.

Similar, but smaller, declines were seen for their 10 and two year counterparts.

The only other market reaction to speak of was a dip in the value of the pound which lost three tenths of a cent against the dollar and the euro.