Chancellor Rachel Reeves delivered the Spring Statement 2026 on 3 March 2026. True to the government's policy of reserving significant tax and spending announcements for the annual Autumn Budget, no new tax measures were introduced. The statement focused on updated OBR economic forecasts, confirmation of previously announced changes coming into force in April 2026, and reassurance about fiscal stability in an uncertain global environment.
What the Chancellor said
The Chancellor argued that the government's economic plan was delivering results, pointing to falling inflation, reduced borrowing, and rising living standards. She acknowledged that global uncertainty, particularly from the ongoing conflict in the Middle East and energy market volatility, presented risks to the UK outlook. The Chancellor emphasised fiscal stability and confirmed there would be no new spending or tax announcements outside of the annual Budget process.
OBR forecasts at a glance
| Indicator | OBR forecast (March 2026) | Previous forecast (Nov 2025) |
|---|---|---|
| GDP growth 2026 | 1.1% | 1.4% |
| GDP growth 2027 | 1.6% | 1.5% |
| Inflation (CPI) 2026 average | 2.3% | 2.5% |
| Unemployment 2026 | 5.3% | 4.9% |
| Fiscal headroom 2029/30 | £23.6bn | £21.7bn |
GDP growth for 2026 was downgraded from 1.4% to 1.1%, reflecting weaker-than-expected output in late 2025 and subdued business sentiment. Unemployment is forecast to peak at 5.3% in 2026 before declining. Inflation is expected to average 2.3% across 2026, with the 2% target met from 2027.
No new taxes: what was confirmed
The Spring Statement did not introduce any new tax measures. However, it confirmed that the previously announced changes from the Autumn Budget 2025 will proceed as planned. The OBR noted that the government remains on track to meet its fiscal rules, with headroom of £23.6 billion against the fiscal rules in 2029/30.
April 2026 changes now in force
Several significant measures announced in the 2024 and 2025 Autumn Budgets took effect from 6 April 2026. These include:
- Dividend tax basic rate rises to 10.75%; higher rate rises to 35.75%
- MTD ITSA mandatory for sole traders and landlords with income above £50,000
- Capital allowances writing down allowance reduced to 14% (main rate)
- Business Property Relief and Agricultural Property Relief changes (100% relief up to £2.5m combined cap)
- Two-child benefit cap removed
- Doubled Corporation Tax late filing penalty (£200 for day-one late)
Fiscal headroom
Fiscal headroom increased slightly to £23.6 billion since the Autumn Budget, mainly due to lower borrowing costs and higher capital gains tax revenues driven by stronger equity prices. The OBR noted this headroom remains slim by historic standards and could be quickly eroded by global developments, particularly the Middle East conflict and its potential impact on energy prices.
What to watch for the Autumn Budget 2026
With no new measures in the Spring Statement, attention turns to the Autumn Budget 2026. Analysts suggest the following areas are in focus:
- Savings income and property income tax rates, which are due to rise by 2% from April 2027 as previously announced
- Further measures if growth underperforms or borrowing costs rise
- Potential review of the ISA investment rule changes planned for April 2027
- Fuel duty, where the 5p cut is scheduled to end in September 2026
Key takeaways
- No new taxes or spending changes in Spring Statement 2026.
- GDP growth for 2026 downgraded to 1.1%; inflation falling to 2.3%.
- Unemployment forecast to peak at 5.3% in 2026.
- April 2026 changes, including higher dividend tax and MTD ITSA, are now live.
- Fiscal headroom increased modestly to £23.6 billion but remains tight.
- The Autumn Budget 2026 is the next scheduled fiscal event.