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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 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:

Economy

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.

Economic growth chart

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.”

Welfare chapterhead

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.

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Ed Conway examines chancellor’s numbers

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.

Defence

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.

Taxes

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 it, saying the government will increase the number of tax fraudsters charged each year by 20%.

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

Departmental cuts chapterhead

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.

Housing

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 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, reforms will only increase the overall housing stock by 0.5% by the end of 2030, falling short of the government’s initial pledge to build 1.5 million houses.

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.

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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.

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Government’s defence spending increase ‘more spin than substance’, insiders tell Sky News

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Government's defence spending increase 'more spin than substance', insiders tell Sky News

The government has been accused of “spin and tinkering” over an announcement about an increase in defence spending which falls far short of what is needed, Sky News understands.

An entire fleet of military helicopters – the Royal Air Force’s Puma aircraft – was retired this week as part of a cost-saving plan to scrap older kit that was announced in November.

The sight of old but still airworthy helicopters being taken out of service before a replacement is ready – creating a capability gap – contrasts with statements by Rachel Reeves, the chancellor, and John Healey, the defence secretary, about boosting the defence budget.

The Puma aircraft's last flight. Pic: UK MOD
Image:
The Puma aircraft’s last flight. Pic: UK MOD

Sir Ben Wallace, the longest-serving Conservative defence secretary, said he had expected better given the urgent need to rearm at a time of heightened threats and following Donald Trump’s warnings to Europe to stop relying on the United States to bankroll its security.

“We are at the dawn of a new era of insecurity across the world,” Sir Ben said.

“The US has warned us for a decade about not taking them for granted, and we all did nothing. In Germany, Poland, and France the penny has dropped and they have embraced a necessary culture change and re-prioritisation of government spend.

“In the UK, the government still thinks it is about spin and tinkering. It fools no one, and we risk losing our credibility and leadership on defence amongst allies.”

Sir Ben Wallace. Pic: Reuters
Image:
Sir Ben Wallace. Pic: Reuters

In her spring statement on Wednesday, the chancellor announced an extra £2.2bn for defence this coming financial year.

Ms Reeves told MPs it was a further “down payment” on a promise by the prime minister to lift expenditure on defence to 2.5% of GDP from April 2027. Defence spending is currently around 2.3% of gross national income. The new money will help inch it up to 2.36%.

The chancellor, defence secretary and prime minister have repeatedly phrased their plan to inject cash into the armed forces over this parliament as “the biggest sustained increase in defence spending since the end of the Cold War”.

But defence insiders say, while any new money is welcome, this claim is more spin than substance because the defence budget largely suffered repeated cuts since the Soviet Union collapsed.

Chancellor Rachel Reeves. Pic: PA
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Chancellor Rachel Reeves announced an additional £2.2bn in defence spending in her spring statement. Pic: PA

Also, focusing on a slogan does not answer the question of whether an extra £2bn over the next 12 months is enough to transform the British Army, Royal Navy and Royal Air Force at the speed that is necessary, they said.

Asked whether it was sufficient, multiple military sources and a defence industry source collectively said “no”.

“This is just another sticking plaster that overlooks decades of underinvestment and chronic financial mismanagement of our armed forces,” the defence industry source said.

“Increasing spending or a focus on ‘novel technologies’ ignores the fact that we have let a broken system flourish.

“Time and time again, we see celebration over procuring outdated solutions while their manufacturers get away with significant delays or overspends with seemingly few repercussions.

“While we continue to spin and fight over tiny percentages of spending, we are allowing our armed forces to get hollowed out in front of us, hoping that government soundbites will provide the deterrence that our current equipment can’t.”

Defence Secretary John Healey on a nuclear submarine on 17 March . Pic: Crown copyright 2025
Image:
Defence Secretary John Healey on a nuclear submarine on 17 March. Pic: Crown copyright 2025

A military source said the additional £2.2bn for the year to March 2026 was a step in the right direction, but said it would merely keep defence on “life support”.

The situation only starts to improve marginally in two years’ time when the defence budget is finally forecast to hit 2.5% of GDP, the source said.

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This is despite the UK being a leading member of the “coalition of the willing”, with Sir Keir Starmer pledging to deploy forces to secure any ceasefire deal in Ukraine – a move that would put huge additional strain on his already stretched armed forces.

PM Sir Keir Starmer and Defence Secretary John Healey on a nuclear submarine. Pic: Crown Copyright 2025
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PM Sir Keir Starmer and Defence Secretary John Healey on a nuclear submarine. Pic: Crown Copyright 2025

While the UK talks about 2.5% for the defence budget, Mark Rutte, the secretary general of NATO, says allies must spend more than 3%, while Mr Trump wants them to aim for 5%.

In 2020, Boris Johnson, as the prime minister, said a plan to increase the defence budget by £16bn over four years, on top of a commitment to lift defence spending by 0.5% above inflation for each year of the parliament – so what was described at the time as an additional £24bn in total – was the biggest boost to defence expenditure since the Cold War.

Sir Keir has added the word “sustained” when describing the size of his defence spending boost – though that will depend upon the accuracy of forecasts that GDP will expand at the rate predicted in the coming years.

Sir Ben said: “The UK is facing some of the highest threats in a generation, yet John Healey thinks spin is the appropriate response. He fools no one – not the men and women of the armed forces and not our enemies. I had expected better of him.”

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‘Experiencing the solar system for yourself’: Sun obscured over the UK in partial solar eclipse

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'Experiencing the solar system for yourself': Sun obscured over the UK in partial solar eclipse

UK stargazers were treated to a partial solar eclipse on Saturday morning, a phenomenon that sees the sun partially obscured by the moon.

Up to 40% of the sun was covered as the moon passed between the sun and Earth, partly obscuring the star.

Members of the public gathered to watch the spectacle in Greenwich while thousands more followed online.

Science correspondent Thomas Moore wearing solar eclipse viewing glasses in Greenwich
Image:
Science correspondent Thomas Moore wearing solar eclipse viewing glasses in Greenwich

Saturday's partial solar eclipse. Pic: Royal Observatory Greenwich
Image:
Saturday’s partial solar eclipse at around 10.30am. Pic: Royal Observatory Greenwich

“It’s a different way of experiencing the mechanics of the solar system for yourself,” said Catherine Muller, an astronomer at Royal Observatory to Sky News science correspondent Thomas Moore.

“We know about it theoretically, we know that the moon orbits the Earth and they might pass by us but really getting to see it in a new and different way is quite exciting for a lot of people.”

Hobby astronomers watch the partial eclipse in Germany. Pic: AP
Image:
Hobby astronomers watch the partial eclipse in Germany. Pic: AP

A solar telescope that projects a magnified image of the sun onto a piece of paper
Image:
A solar telescope that projects a magnified image of the sun on to a piece of paper

Looking directly at the sun is dangerous so astronomers used glasses, solar telescopes and pinhole cameras to watch the event.

The beginning of the partial eclipse above the roof of Berlin's Olympic Stadium. Pic: Reuters
Image:
The beginning of the partial eclipse above the roof of Berlin’s Olympic Stadium. Pic: Reuters

The eclipse was visible across several other parts of the world, including western Europe, Greenland, north-west Africa and north-east North America.

More on Eclipse

For people in the southeast of England – where the weather meant the UK views were best – the peak of the eclipse was at around 11.03am.

At that point, around 30-40% of the sun was obscured, according to the Royal Observatory.

Eclipse chasers in awe as moon takes a nibble from the sun

Most of us are normally unaware of the mechanics of the solar system.

But when the silhouette of the moon slides across the disc of the sun during an eclipse you get to marvel at the precision movement of celestial objects.

At the Royal Observatory in Greenwich, home of the meridian, the partial eclipse started at 10.07, with the moon appearing to take nibble from the edge of the sun.

Crowds watched through eclipse glasses, awed by the best show from Earth.

Wispy cloud had drifted across the sun by the time the eclipse peaked an hour later. But not enough to spoil the view.

Read the full story here

Northwest Scotland had the most coverage of the sun with 47.9% in Gallan Head, with Manchester getting 36.1% of coverage.

Dover had the least coverage of the sun with only 28.1%.

The next total solar eclipse is not for another 65 years in 2090, so Ms Muller recommends “making the most of the partial ones when they’re around”.

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How to see today’s partial solar eclipse from the UK

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How to see today's partial solar eclipse from the UK

Stargazers could catch a glimpse of a partial solar eclipse this morning, where the sun looks like it’s had a bite taken out of it.

It only occurs a handful of times a year, when the moon passes between the sun and Earth, and partly obscures the star.

Here’s what you need to know for the best chance of seeing it.

When is it?

It’s expected to be visible in the UK from 9.56am to 12.14pm today.

For people in the south of England – where the weather means views should be best – the peak of the eclipse is set to be at around 11.03am.

This is when the eclipse reaches its “maximum” – the moment when the greatest portion of the sun is hidden.

According to the Royal Observatory, the maximum this time will see around 30-40% of the sun obscured.

What is the weather meant to be like?

Some parts of the UK will see more of the eclipse than others. Northwest Scotland is expected to see the most coverage with 47.9% in Gallan Head.

Dover in southwest England is set to see the least coverage of the eclipse with only 28.1% of the sun blocked by the moon, while Manchester is expected to have 36.1% of coverage.

Check the forecast where you are

Met Office meteorologist Alex Burkill said: “The further northwest you are in the UK the more of an eclipse you are likely to have, whereas towards the southeast it’s a little bit less – but still 30%, and still a large chunk taken out of the sun.”

Met Office maps show clear skies across southeast England at the time that the eclipse starts, with partial cloud above Manchester and northwest England, and cloud above most of Scotland.

The areas expected to have some of the best eclipse coverage are also likely to see cloud and rain at the time.

Conditions are widely meant to clear over the weekend, with temperatures up to 17C in the South East and 14C in the North on Sunday – but it may come slightly too late to have a good view of the sun today.

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What are the key takeaways from the spring statement?
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How can I give myself the best chance of seeing it?

Even though part of the sun will be covered, its brightness will still be dangerous to the naked eye, so experts say it can cause serious and permanent damage if you look straight at it without appropriate protection.

Also: standard sunglasses do not count as protection.

If you want more than a quick glance, you can use a pinhole projector or solar eclipse viewing glasses.

You can make pinhole projectors at home, simply by making a hole in a piece of card, holding the card up to the sun and holding another piece of paper behind the card.

The shape of the sun will appear projected onto the paper, without harming you.

Solar eclipse viewing glasses can be purchased online.

For those who can’t see it in person, the Royal Observatory is streaming the partial eclipse live through one of its modern telescopes on its YouTube channel, with coverage starting from 10am.

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