Connect with us

Published

on

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.

Politics latest: Follow live updates

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.

Some tough forecasts beyond headline figures

The independent forecaster also published its economic outlook on Wednesday, showing there’s a 54% chance the chancellor will not break her self-imposed fiscal rules to bring down government debt and balance the budget by 2030.

Living standards, as measured by household disposable income, will fall after this year to almost no growth in 2027-28 before rising again due to firms rebuilding profit margins, wage growth slowing, taxes rising, and welfare measures taking effect.

The OBR also raised its expectation for unemployment and net migration – the number of people immigrating to the UK minus those emigrating.

The unemployment rate, the percentage of people out of work, will rise to 4.5% this year. This is 0.4 percentage points or 160,000 people higher than first thought in the October forecast.

Net migration will fall sharply, the OBR said, due to a tightening of visa policies and higher levels of emigration. But the forecast has been upped by 25,000 since October as a higher share of immigrants are staying in the UK under the new migration system.

Please use Chrome browser for a more accessible video player

The Chancellor said the OBR has downgraded the UK growth forecast for 2025 from 2% to 1%.

At the same time, there will be a reduction in people neither in work nor looking for work due to a reduction in caring as birth rates fall and childcare provision is expanded.

But there are also fewer people in this position, classed as “economically inactive” than previously thought, the OBR said. The government launched its welfare cuts in an effort to reduce this economic inactivity.

Further cuts are to come, the OBR said, as “unprotected” government departments such as local government justice, the environment, Home Office and culture may need to be cut by 0.8% a year from 2026-27 “to accommodate assumed commitments in other areas”.

Prices overall will go up even higher than initially anticipated, according to the OBR, which now forecasts inflation will rise to 3.8% in July due to higher energy, food and water bills. This will fall rapidly, however, from next year.

‘No shortcuts to growth’

Ms Reeves 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 everyday economy.

“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”.

Please use Chrome browser for a more accessible video player

Ed Conway examines chancellor’s numbers

Political reaction

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”.

Continue Reading

Politics

US DOJ could still pursue money laundering, sanctions charges against Roman Storm

Published

on

By

US DOJ could still pursue money laundering, sanctions charges against Roman Storm

US DOJ could still pursue money laundering, sanctions charges against Roman Storm

Roman Storm’s trial verdict leaves the door open for US prosecutors to retry the Tornado Cash developer, attorneys said.

Continue Reading

Politics

Diane’s husband was killed by a reckless driver – the wait for justice was almost as painful

Published

on

By

Diane's husband was killed by a reckless driver - the wait for justice was almost as painful

Diane Gall’s husband, Martyn, had been out on a morning bike ride with his friends on their usual route one winter morning in November 2020 – when he was killed by a reckless driver. 

Diane and her daughters had to wait almost three years for her husband’s case to be heard in court.

The case was postponed three times, often without warning.

“You just honestly lose faith in the system,” she says.

“You feel there’s a system there that should be there to help and protect victims, to be victims’ voices, but the constant delays really take their toll on individuals and us as a family.”

Diane Gall
Image:
Diane Gall

The first trial date in April 2022 was cancelled on the day and pushed four months later.

The day before the new date, the family were told it wasn’t going ahead due to the barristers’ strike.

It was moved to November 2022, then postponed again, before eventually being heard in June the following year.

“You’re building yourself up for all these dates, preparing yourself for what you’re going to hear, reliving everything that has happened, and it’s retraumatising,” says Diane.

Diane Gall's husband, Martyn
Image:
Diane Gall’s husband, Martyn

‘Radical’ reform needed

Diane’s wait for justice gives us an insight into what thousands of victims and their families are battling every day in a court system cracking under the weight of a record-high backlog.

There are 76,957 cases waiting to be heard in Crown Courts across England and Wales, as of the end of March 2025.

To relieve pressure on the system, an independent review by Sir Brian Leveson last month made a number of recommendations – including creating a new division of the Crown Court known as an intermediate court, made up of a judge and two magistrates, and allowing defendants to choose to be tried by judge alone.

He said only “radical” reform would have an impact.

Please use Chrome browser for a more accessible video player

Will court reforms tackle backlog?

But according to exclusive data collected for Sky News by the Law Society, there is strong scepticism among the industry about some proposed plans.

Before the review was published, we asked 545 criminal lawyers about the idea of a new tier to the Crown Court – 60% of them told us a type of Intermediate Court was unlikely to reduce the backlog.

chart visualization

“It’s moving a problem from one place to another, like moving the deck chairs on the Titanic. It’s not going to do anything,” says Stuart Nolan, chair of the Law Society’s criminal law committee.

“I think the problem with it is lack of resources or lack of will to give the proper resources.

“You can say we need more staff, but they’re not just any staff, they are people with experience and training, and that doesn’t come quickly or cheap.”

Instead, the lawyers told us creating an additional court would harm the quality of justice.

chart visualization

Chloe Jay, senior partner at Shentons Solicitors, agrees the quality of justice will be impacted by a new court division that could sit without a jury for some offences.

She says: “The beauty of the Crown Court is that you have two separate bodies, one deciding the facts and one deciding law.

Casey Jenkins, president of London Criminal Court Solicitors' Association
Image:
Casey Jenkins, president of London Criminal Court Solicitors’ Association

“So the jury doesn’t hear the legal arguments about what evidence should be excluded, whether something should be considered as part of the trial, and that’s what really gives you that really good, sound quality of justice, because you haven’t got one person making all the decisions together.

“Potentially in an intermediate court, that is what will happen. The same three people will hear those legal arguments and make the finding of guilt or innocence.”

The most striking finding from the survey is that 73% of criminal lawyers surveyed are worried about offences no longer sitting in front of a jury.

chart visualization

Casey Jenkins, president of London Criminal Court Solicitors’ Association, says this could create unconscious bias.

“There’s a real risk that people from minority backgrounds are negatively impacted by having a trial by a judge and not a jury of their peers who may have the same or similar social background to them,” she says.

“A jury trial is protection against professional judicial decisions by the state. It’s a fundamental right that can be invoked.”

Instead of moving some offences to a new Crown Court tier, our survey suggests criminal lawyers would be more in favour of moving cases to the magistrates instead.

Under the Leveson proposals, trials for offences such as dangerous driving, possessing an offensive weapon and theft could be moved out of the Crown Courts.

chart visualization

‘Catastrophic consequences’

Richard Atkinson, president of the Law Society, says fixing the system will only work with fair funding.

“It’s as important as the NHS, it’s as important as the education system,” he says. “If it crumbles, there will be catastrophic consequences.”

Ms Jenkins agrees that for too long the system has been allowed to fail.

“Everyone deserves justice, this is just not the answer,” she says.

“It’s just the wrong solution to a problem that was caused by chronic, long-term under-investment in the criminal justice system, which is a vital public service.

“The only way to ensure that there’s timely and fair justice for everybody is to invest in all parts of the system from the bottom up: local services, probation, restorative justice, more funding for lawyers so we can give early advice, more funding for the police so that cases are better prepared.”

Government vows ‘bold and ambitious reform’

In response to Sky News’ findings, the minister for courts and legal services, Sarah Sackman KC MP, told Sky News: “We inherited a record and rising court backlog, leaving many victims facing unacceptable delays to see justice done.

“We’ve already boosted funding in our courts system, but the only way out of this crisis is bold and ambitious reform. That is why we are carefully considering Sir Brian’s bold recommendations for long-term change.

“I won’t hesitate to do whatever needs to be done for the benefit of victims.”

The driver that killed Diane’s husband was eventually convicted. She wants those making decisions about the court system to remember those impacted the most in every case.

Every victim and every family.

“You do just feel like a cog in a big wheel that’s out of your control,” she says. “Because you know justice delayed is justice denied.”

Continue Reading

Politics

KakaoBank plans to ‘actively participate’ in stablecoin market: Report

Published

on

By

KakaoBank plans to ‘actively participate’ in stablecoin market: Report

KakaoBank plans to ‘actively participate’ in stablecoin market: Report

South Korea’s KakaoBank is looking at services for the issuance and custody of stablecoins with plans to “actively participate” in the crypto market.

Continue Reading

Trending