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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”.

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Major incident declared in Birmingham as ‘17,000 tonnes’ of rubbish piles up

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Major incident declared in Birmingham as '17,000 tonnes' of rubbish piles up

A major incident has been declared in Birmingham over an ongoing bin strike, which has left around 17,000 tonnes of waste on the streets of the city.

Birmingham City Council said the “regrettable” step was taken in response to public health concerns, with picket lines blocking depots and preventing waste vehicles from collecting rubbish.

Members of Unite have been on all-out strike since 11 March in a row over pay, which the union claims will leave some members of staff £8,000 worse off. A series of walkouts have also impacted refuse collections since January.

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By declaring a major incident, the council will be able to increase the availability of street cleansing and fly-tip removal with an additional 35 vehicles and crews around the city.

This action will also allow the council to explore what further support is available from neighbouring authorities and the government to assist in the management of the situation.

Council leader John Cotton said it was a “regrettable” step, but the situation was “causing harm and distress” to local people.

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Birmingham suffers bin crisis

“I respect the right to strike and protest, however actions on the picket line must be lawful and sadly the behaviour of some now means we are seeing a significant impact on residents and the city’s environment,” he said.

Jim McMahon, the minister for local government, said the all-out strike by Unite members is causing “misery and disruption” to residents, as well as posing a “public health risk to the city’s most vulnerable and deprived”.

He said the government “stands ready” to respond to any request for extra resources, but insisted that any deal to end the bin strike must “maintain value for money”.

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‘They can’t hold the city to ransom’

Mr McMahon told the Commons: “This is causing a public health risk to the city’s most vulnerable and deprived residents. As a result, I am aware that Birmingham has today declared a major incident to give them the mechanisms to better manage the impact on local residents.

“I support that decision, and I will back local leaders.”

The minister added that the government will “not hesitate to give support in any way that Birmingham leaders need”.

He said: “If local leaders on the ground in Birmingham feel that tackling these issues goes beyond the resources available to them and they request national support, then of course we stand ready to respond to any such request.”

Members of the Unite union met with Birmingham City Council last Thursday, but talks have so far failed.

Unite says the dispute will not end unless the “hugely damaging” cuts to bin collectors’ wages are reversed.

But Birmingham City Council says the aim of the restructuring is to create a “modern, sustainable and consistently reliable waste collection service”.

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‘Extensive search’ under way for 11-year-old girl who fell into River Thames

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'Extensive search' under way for 11-year-old girl who fell into River Thames

An “extensive search” is under way to find an 11-year-old girl after she fell into the River Thames in east London.

The Metropolitan Police said it was called at around 1.15pm on Monday to reports the girl had entered the river near Barge House Causeway, near London City Airport.

All emergency services are forming a “large-scale response” to the incident.

The girl’s next of kin have been made aware and are being supported by officers.

The London Ambulance Service was also called at a similar time, after receiving a report of a person in the water at Lowestoft Mews, which is close to the airport.

“We sent resources to the scene, including an ambulance crew, an advanced paramedic, an incident response officer and members of our hazardous area response team,” a spokesperson said.

“Our crews assisted our emergency services partners at the scene but were later stood down.”

London Fire Brigade Deputy Assistant Commissioner Joseph Kenny added that “firefighters responded to reports of a person in the River Thames near Lowestoft Mews, Newham”.

He said crews from East Ham, Barking, Ilford and Bexley fire stations were sent to the scene alongside other emergency services.

“The brigade also deployed its drone team and fire boat as part of its response, with crews carrying out a systematic search of the area,” he added.

“The brigade was first called about the incident at 1.23pm. Search operations for firefighters were concluded at 3.49pm when responsibility for the incident was left with the police.”

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Sentencing guidelines for ethnic minority suspects delayed after backlash

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Sentencing guidelines for ethnic minority suspects delayed after backlash

Controversial sentencing guidelines that were due to come into force on Tuesday have been delayed after a political backlash.

The Sentencing Council, the independent body that sets out sentencing guidance to courts in England and Wales, was due to bring in new rules around how judges should determine punishment for people from ethnic minority backgrounds.

The new guidance states that a pre-sentence report – the results of which are taken into account when considering a criminal’s sentence – will “usually be necessary” before handing out punishment for someone from an ethnic, cultural or faith minority, alongside other groups such as young adults aged 18 to 25, women and pregnant women.

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Shabana Mahmood, the justice secretary, had said the proposed guidance was “unacceptable” and amounted to “differential treatment before the law” as she urged the council to reverse it.

When the Sentencing Council initially refused her request, Ms Mahmood threatened to legislate to overturn the guidance if necessary.

She confirmed this evening that she would introduce legislation on Tuesday to block these guidelines coming into effect.

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Robert Jenrick has hit out at what he says is

The Sentencing Council has now delayed the “in force date of the guideline pending such legislation taking effect”.

It said in a statement that the council “remains of the view that its guideline, imposition of community and custodial sentences, as drafted is necessary and appropriate”.

However, in a meeting between the chairman Lord Justice Davis and Ms Mahmood on Monday, the minister “indicated her intention to introduce legislation imminently that would have the effect of rendering the section on ‘cohorts’ in the guideline unlawful”.

The council said it is unable to introduce a guideline when there is a draft bill due for introduction that would make it unlawful.

Ms Mahmood said: “This differential treatment is unacceptable – equality before the law is the backbone of public confidence in our justice system. I will change the law to ensure fairness for all in our courts.”

The Sentencing Council also attracted criticism from shadow justice secretary Robert Jenrick, who said its updated guidance was an example of “two-tier justice” that would lead to “blatant bias” against Christians and straight white men.

He also argued that it would make “a custodial sentence less likely for those from an ethnic minority, cultural minority, and/or faith minority community” – something the council denied.

The council previously rejected calls from the government to abandon the guidelines, which ask judges to consider offenders’ racial, cultural and religious background when deciding a sentence.

Lord Davis denied that pre-sentence reports reduced the prospect of a jail sentence.

However, he said the council would provide “some clarification of the language” to avoid confusion.

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