The Spring Statement 2025 was delivered on 26 March 2025. As with prior Spring Statements under Labour's fiscal framework, it was designed as an economic update rather than a tax-raising event. No new taxes were announced, and the Chancellor reaffirmed her intention to reserve major fiscal decisions for the annual Autumn Budget. The statement was dominated by updated forecasts from the Office for Budget Responsibility (OBR) and growing concern about the impact of frozen tax thresholds.
What the Chancellor announced
The 2025 Spring Statement contained no new tax or spending measures. Its primary purpose was to publish the OBR's updated economic forecasts alongside a statement of fiscal direction. The Chancellor used the occasion to reaffirm the government's commitment to its two fiscal rules: keeping day-to-day spending within tax receipts, and stabilising public sector debt as a share of GDP over the medium term.
The statement also signalled the direction of travel for the Autumn Budget 2025, noting that spending pressures remained significant and that further decisions would be needed in the autumn.
OBR economic forecasts
| Indicator | OBR forecast (March 2025) |
|---|---|
| GDP growth 2025 | 1.5% |
| Inflation (CPI) 2025 | Falling towards 2% target |
| Unemployment | Rising moderately from 2024 levels |
| Public sector net borrowing | Within forecast range |
Frozen thresholds: ongoing impact
By the time of the 2025 Spring Statement, the freeze on income tax thresholds announced in 2022 had already resulted in a significant increase in the number of people paying income tax at higher rates. With wages rising through 2023 and 2024, fiscal drag had pushed hundreds of thousands of basic rate taxpayers into the higher rate band and increased tax liabilities for workers at all income levels.
The Spring Statement confirmed that the freeze would remain in place through to at least 2028, as previously announced. The Autumn Budget 2025 subsequently extended this freeze to 2031.
What it meant for the Autumn Budget 2025
The Spring Statement 2025 set the context for a significant Autumn Budget in November 2025. Analysts noted that HMRC's growing tax take from fiscal drag, combined with pressures on public spending, created the conditions for a tax-raising Budget. The Autumn Budget 2025 subsequently introduced higher dividend tax rates, extended threshold freezes, and confirmed the MTD ITSA launch timeline.
Key takeaways
- No new tax announcements in the Spring Statement 2025.
- The government confirmed a single annual Budget approach, with tax changes reserved for the Autumn.
- Frozen thresholds continued to generate significant revenue through fiscal drag.
- The OBR forecast modest GDP growth and declining inflation for 2025.
- The Autumn Budget 2025 was signalled as the vehicle for any further tax changes.