Overview
- An OBR representative cautioned that the latest escalation in the Middle East could have a very significant impact on the UK outlook, which the Spring Forecast did not capture.
- The OBR put fiscal headroom at £23.6bn, up from £21.7bn, but Capital Economics estimates sustained higher oil and gas prices could cut this to about £16.5bn.
- Official projections show GDP growth of 1.1% in 2026 and government debt near 95% of GDP by 2031, with unemployment now forecast to reach 5.3% this year.
- The IFS says lifting defence spending toward 3.5% of GDP would cost roughly £35–£40bn annually, likely necessitating substantial tax rises or cuts elsewhere.
- Business groups say the statement offered little immediate relief and feels out of date for firms facing rising input costs, while the Chancellor insists the government has the right plan.