Britain’s Chancellor of the Exchequer Rachel Reeves speaks during the annual meeting of the World Economic Forum (WEF) in Davos on January 20, 2026. The World Economic Forum takes place in Davos from January 19 to 23, 2026.
Fabrice Coffrini | afp | fake images
As UK Finance Minister Rachel Reeves prepares to give an official update on the state of the British economy and public finances, economists say they do not expect dramatic revisions.
“Overall, we don’t expect any fireworks,” said Sanjay Raja, chief economist at Deutsche Bank in the United Kingdom, in a preview of the spring budget update, formally known as the Spring Statement, which Reeves will present on Tuesday.
The government had already signaled that it is prioritizing the annual Autumn Budget later this year as its main fiscal event, where it lays out its main spending and tax plans for next year.
In November, Chancellor Reeves said the Spring Statement would include an “interim update on the economy and public finances” from the independent public finance watchdog, the Office for Budget Responsibility (OBR), and that there would be no policy changes unless there was “a significant change in the economic outlook that requires a response”.
“As the Autumn Budget took place only three months ago, we see very little new information” that could be presented in the 2026 Spring Statement, Raja said, noting that “a lot has been done to downplay it.”
Reeves is likely to emphasize that his previously revealed plans, including corporate tax increases and big infrastructure spending, are starting to bear fruit.
what to expect
As with the Autumn Budget, the Spring Statement is accompanied by the OBR’s latest economic and fiscal outlook, as it assesses the government’s fiscal and spending plans.
The OBR is responsible for assessing whether the chancellor is on track to meet her “fiscal rules” on spending, borrowing and debt reduction, but while it would normally assess this at the time of the autumn and spring statements, it will now only give its assessment of the fiscal rules in the autumn.
“There will be no formal assessment of whether or not the government is meeting its (fiscal) targets, but the figures will be there,” the OBR said.
Analysts will be watching how much fiscal “room” Reeves has to comply with its fiscal rules, given major public spending initiatives and U-turns on cost-cutting measures in recent months.
“The headroom will be very easy to infer, and we feel the market expects it to remain around £20 billion,” Morgan Stanley economists said in a note ahead of the Spring Statement. “Modest adjustments to forecasts, strong cash tax receipts and £3.5bn in additional current spending combine to result in a small fall in fiscal headroom,” they noted.
Britain’s Chancellor of the Exchequer Rachel Reeves (R) stands with Britain’s Prime Minister Keir Starmer (L) as she is applauded after giving her speech on the second day of the Labor Party’s annual conference in Liverpool, northwest England, Sept. 29, 2025.
Oli Scarf | afp | fake images
Reeves and the ruling Labor Party will be cautious about announcing anything that could upset consumers or businesses at a time when the party is struggling in opinion polls ahead of national local elections in May, the next electoral test before a general election, which is due to take place in 2029.
Deutsche Bank’s Raja said there had been speculation Reeves might surprise with a sweetener or two, but added: “We think any new spending measures will be marginal, if anything.”
“Big picture…pressures on public finances are increasing. Expenditure funds after the current expenditure review period remain tight,” Raja added.
