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.
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.
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4:26
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.
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 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.
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”.
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 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.
Another hint that tax rises are coming in this autumn’s budget has been given by a senior minister.
Speaking to Sunday Morning with Trevor Phillips, Transport Secretary Heidi Alexander was asked if Sir Keir Starmer and the rest of the cabinet had discussed hiking taxes in the wake of the government’s failed welfare reforms, which were shot down by their own MPs.
Trevor Phillips asked specifically if tax rises were discussed among the cabinet last week – including on an away day on Friday.
Tax increases were not discussed “directly”, Ms Alexander said, but ministers were “cognisant” of the challenges facing them.
Asked what this means, Ms Alexander added: “I think your viewers would be surprised if we didn’t recognise that at the budget, the chancellor will need to look at the OBR forecast that is given to her and will make decisions in line with the fiscal rules that she has set out.
“We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that.”
Ms Alexander said she wouldn’t comment directly on taxes and the budget at this point, adding: “So, the chancellor will set her budget. I’m not going to sit in a TV studio today and speculate on what the contents of that budget might be.
“When it comes to taxation, fairness is going to be our guiding principle.”
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Afterwards, shadow home secretary Chris Philp told Phillips: “That sounds to me like a barely disguised reference to tax rises coming in the autumn.”
He then went on to repeat the Conservative attack lines that Labour are “crashing the economy”.
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10:43
Chris Philp also criticsed the government’s migration deal with France
Mr Philp then attacked the prime minister as “weak” for being unable to get his welfare reforms through the Commons.
Discussions about potential tax rises have come to the fore after the government had to gut its welfare reforms.
Sir Keir had wanted to change Personal Independence Payments (PIP), but a large Labour rebellion forced him to axe the changes.
With the savings from these proposed changes – around £5bn – already worked into the government’s sums, they will now need to find the money somewhere else.
The general belief is that this will take the form of tax rises, rather than spending cuts, with more money needed for military spending commitments, as well as other areas of priority for the government, such as the NHS.
It is “shameful” that black boys growing up in London are “far more likely” to die than white boys, Metropolitan Police chief Sir Mark Rowley has told Sky News.
In a wide-ranging interview with Sunday Morning with Trevor Phillips, the commissioner saidthat relations with minority communities are “difficult for us”, while also speaking about the state of the justice system and the size of the police force.
Sir Mark, who came out of retirement to become head of the UK’s largest police force in 2022, said: “We can’t pretend otherwise that we’ve got a history between policing and black communities where policing has got a lot wrong.
“And we get a lot more right today, but we do still make mistakes. That’s not in doubt. I’m being as relentless in that as it can be.”
He said the “vast majority” of the force are “good people”.
However, he added: “But that legacy, combined with the tragedy that some of this crime falls most heavily in black communities, that creates a real problem because the legacy creates concern.”
Sir Mark, who also leads the UK’s counter-terrorism policing, said black boys growing up in London “are far more likely to be dead by the time they’re 18” than white boys.
“That’s, I think, shameful for the city,” he admitted.
“The challenge for us is, as we reach in to tackle those issues, that confrontation that comes from that reaching in, whether it’s stop and search on the streets or the sort of operations you seek.
“The danger is that’s landing in an environment with less trust.
“And that makes it even harder. But the people who win out of that [are] all of the criminals.”
Image: Met Police Commissioner Sir Mark Rowley
The commissioner added: “I’m so determined to find a way to get past this because if policing in black communities can find a way to confront these issues, together we can give black boys growing up in London equal life chances to white boys, which is not what we’re seeing at the moment.
“And it’s not simply about policing, is it?”
Sir Mark said: “I think black boys are several times more likely to be excluded from school, for example, than white boys.
“And there are multiple issues layered on top of each other that feed into disproportionality.”
‘We’re stretched, but there’s hope and determination’
Sir Mark said the Met is a “stretched service” but people who call 999 can expect an officer to attend.
“If you are in the middle of a crisis and something awful is happening and you dial 999, officers will get there really quickly,” Sir Mark said.
“I don’t pretend we’re not a stretched service.
“We are smaller than I think we ought to be, but I don’t want to give a sort of message of a lack of hope or a lack of determination.”
“I’ve seen the mayor and the home secretary fighting hard for police resourcing,” he added.
“It’s not what I’d want it to be, but it’s better than it might be without their efforts.”
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0:39
How police tracked and chased suspected phone thief
‘Close to broken’ justice system facing ‘awful’ delays
Sir Mark said the criminal justice system was “close to broken” and can be “frustrating” for police officers.
“The thing that is frustrating is that the system – and no system can be perfect – but when the system hasn’t managed to turn that person’s life around and get them on the straight and narrow, and it just becomes a revolving door,” he said.
“When that happens, of course that’s frustrating for officers.
“So the more successful prisons and probation can be in terms of getting people onto a law-abiding life from the path they’re on, the better.
“But that is a real challenge. I mean, we’re talking just after Sir Brian Leveson put his report out about the close-to-broken criminal justice system.
“And it’s absolutely vital that those repairs and reforms that he’s talking about happen really quickly, because the system is now so stressed.”
Giving an example, the police commissioner went on: “We’ve got Snaresbrook [Crown Court] in London – it’s now got more than 100 cases listed for 2029.”
Sir Mark asked Trevor Phillips to imagine he had been the victim of a crime, saying: “We’ve caught the person, we’ve charged him, ‘great news, Mr Phillips, we’ve got him charged, they’re going to court’.
“And then a few weeks later, I see the trial’s listed for 2029. That doesn’t feel great, does it?”
Asked about the fact that suspects could still be on the streets for years before going to trial, Sir Mark conceded it’s “pretty awful”.
He added: “If it’s someone on bail, who might have stolen your phone or whatever, and they’re going in for a criminal court trial, that could be four years away. And that’s pretty unacceptable, isn’t it?”
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She pinned the primary blame for the Met’s culture on its past leadership and found stop and search and the use of force against black people was excessive.
At the time, Sir Mark, who had been commissioner for six months when the report was published, said he would not use the labels of institutionally racist, institutionally misogynistic and institutionally homophobic, which Baroness Casey insisted the Met deserved.
However, London Mayor Sadiq Khan, who helped hire Sir Mark – and could fire him – made it clear the commissioner agreed with Baroness Casey’s verdict.
A few months after the report, Sir Mark launched a two-year £366m plan to overhaul the Met, including increased emphasis on neighbourhood policing to rebuild public trust and plans to recruit 500 more community support officers and an extra 565 people to work with teams investigating domestic violence, sexual offences and child sexual abuse and exploitation.
A leading NHS hospital has warned measles is on the rise among children in the UK, after treating 17 cases since June.
Alder Hey Children’s Hospital in Liverpool said it is “concerned” about the increasing number of children and young people who are contracting the highly contagious virus.
It said the cases it has treated since June were for effects and complications of the disease, which, in rare cases, can be fatal if left untreated.
“We are concerned about the increasing number of children and young people who are contracting measles. Measles is a highly contagious viral illness which can cause children to be seriously unwell, requiring hospital treatment, and in rare cases, death,” the hospital said in a statement to Sky News.
In a separate open letter to parents and carers in Merseyside earlier this month, Alder Hey, along with the UK Health and Security Agency (UKHSA) and directors of Public Health for Liverpool, Sefton and Knowsley, warned the increase in measles in the region could be down to fewer people getting vaccinated.
The letter read: “We are seeing more cases of measles in our children and young people because fewer people are having the MMR vaccine, which protects against measles and two other viruses called mumps and rubella.
“Children in hospital, who are very poorly for another reason, are at higher risk of catching the virus.”
What are the symptoms of measles?
The first symptoms of measles include:
• A high temperature
• A runny or blocked nose
• Sneezing
• A cough
• Red, sore or watery eyes
Cold-like symptoms are followed a few days later by a rash, which starts on the face and behind the ears, before it spreads.
The spots are usually raised and can join together to form blotchy patches which are not usually itchy.
Some people may get small spots in their mouth too.
What should you do if you think your child has measles?
Ask for an urgent GP appointment or call 111 if you think your child has measles.
If your child has been vaccinated, it is very unlikely they have measles.
You should not go to the doctor without calling ahead, as measles is very infectious.
If your child is diagnosed with measles by a doctor, make sure they avoid close contact with babies and anyone who is pregnant or has a weakened immune system.
Image: The skin of a patient after three days of measles infection
It comes after a Royal College of Paediatrics and Child Health (RCPCH) report released earlier this month determined that uptake of vaccines in the UK has stalled over the last decade and is, in many cases, declining.
It said none of the routine childhood vaccinations have met the 95% coverage target since 2021, putting youngsters at risk of measles, meningitis and whooping cough.
The MMR vaccine has been available through the NHS for years. Two doses gives lifelong protection against measles, mumps and rubella.
Image: Two doses of the MMR vaccine give lifelong protection against measles, mumps and rubella. Pic: iStock
According to the latest NHS data, Liverpool was one of the cities outside London with the lowest uptake of the MMR vaccination in 2023-2024.
By the time children were five years old, 86.5% had been give one dose, decreasing to 73.4% for a second dose.
The RCPCH report put the nationwide decline down to fears over vaccinations, as well as families having trouble booking appointments and a lack of continuous care in the NHS, with many seeing a different GP on each visit.
In the US, measles cases are at their highest in more than three decades.
Cases reached 1,288 on Wednesday this week, according to the US Centres for Disease Control and Prevention, with 14 states battling active outbreaks.
The largest outbreak started five months ago in communities in West Texas, where vaccination uptake is low. Since then, three people have died – including two children in Texas and an adult in New Mexico – with dozens more in hospital.