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  "path": "/money/spring-statement-economy-gdp-downgrade-obr-reeves",
  "publishedAt": "2026-03-03T12:51:24.000Z",
  "site": "https://www.gbnews.com",
  "tags": [
    "Borrowing costs SURGE as Bank of England interest rate cut plans 'disrupted'",
    "Ftse 100 sinks 200 points as oil surges past $80 hours before Rachel Reeves gives Spring Statement",
    "Rachel Reeves to claim Labour 'has the right plan for Britain' in Spring Statement",
    "The GB News Editorial Charter"
  ],
  "textContent": "\n\n\nBritain's economic growth forecasts have been downgraded for 2026, Rachel Reeves admitted in the House of Commons today.\n\n\nThe Office for Budget Responsibility (OBR) has downgraded gross domestic product (GDP) growth 1.4 per cent to 1.1 per cent.\n\n###\n\n\n\n\nFurthermore, the OBR forecasts GDP growth will jump to 1.6 per cent in 2027, up from last year's forecasts, and remain at this level the following year.\n\nAs well as this, the UK's fiscal watchdog has projected borrowing will ease by nearly £18billion compared to the autumn, with public sector net borrowing expected to fall from 4.3 per cent this year to 3.6 per cent next year, before hitting 1.8 per cent in 2029-30.\n\n###\n\n\n\n\n###\n\n\n\n\nSpeaking to the House of Commons, the Chancellor provided a fiscal update on the state of the economy, but analysts are concerned that today's outlook is outdated in the wake of the US-Iran war in the Middle East.\n\nShe said: \"Today, the new forecasts from the OBR confirm that our plan is the right one: inflation is down, borrowing is down, living standards are up, and the economy is growing.\n\n\"This Government has restored economic stability. The previous Government let inflation skyrocket to over 11 per cent, stoked interest rates to 15-year highs, and delivered the first Parliament on record where people were poorer at the end than they were at the start.\n\n\"I recognise the impact that had on families. We promised change at the election, and I understand the responsibility on me to deliver that change. I know that the question people will ask themselves at the next general election is this: are me and my family better off? I am determined that the answer will be yes.\"\n\n###\n\n\n\n\n###\n\n\n\n\nNotably, the OBR highlighted that GDP per capita is set to grow more than was expected in their last assessment, with growth of 5.6 per cent expected over this Parliament.\n\nAccording to the Chancellor, Britons are forecast to be over £1,000 a year better off by the next General Election in 2029, when taking inflation into account.\n\nPresident Donald Trump and Israel's decision to launch a military strike on the Islamic Republic has seen the Ayatollah Khamenei killed, the Strait of Hormuz shipping route closed, and key gas and oil rigs in the region targeted.\n\nEnergy prices have surged in response, with economists warning inflation is likely to spike as a result.\n\n###\n\n\n\n\n### LATEST DEVELOPMENTS\n\n\n\n\n  * Borrowing costs SURGE as Bank of England interest rate cut plans 'disrupted'\n  * Ftse 100 sinks 200 points as oil surges past $80 hours before Rachel Reeves gives Spring Statement\n  * Rachel Reeves to claim Labour 'has the right plan for Britain' in Spring Statement\n\n\n\n###\n\n\n\n\n###\n\n\n\n\nLatest official data found UK public sector net borrowing in the financial year to January 2026 came to £112.1billion, around £14.6 billion less than in the same period a year earlier.\n\nJanuary itself delivered a record £30.4billion surplus, the highest for that month since records began, driven by strong receipts and beating the OBR's prior forecast by around £6.3billion\n\nBased on the latest OBR report, UK public sector debt as a share of GDP has nearly tripled over this period with the cost of servicing this debt increasing sharply from £39billion in 2019-20 to £106billion in 2024-25.\n\nFurthermore, the UK Government's 10-year bond yields remain the highest in the G7, and fourth-highest among the advanced economies.\n\n###\n\n\n\n\n###\n\n\n\n\nSusannah Streeter, Chief Investment Strategist, Wealth Club, said: \"The Chancellor was trying to project a 'keep calm and carry on' message, but market turmoil continued during her speech, with UK borrowing costs having shot up and London’s FTSE 100 deep in the red, staying around 2.6 per cent lower.\n\n\"Although there was a nod to the current turbulence, the forecasts don’t take into account the rapidly developing situation in the Middle East.\n\n\"So even though Rachel Reeves championed forecasts of a further fall in inflation, there’s a clear and present danger of the price spiral taking off again due to escalating conflict with Iran.\"\n\n###\n\n\n\n\n\n\n\n\n\n\n**Our Standards:The GB News Editorial Charter **",
  "title": "UK growth forecast DOWNGRADED by OBR in assessment of Rachel Reeves's fiscal plans"
}