Spring Statement 2026 Preview: What Rachel Reeves' 3 March Forecast Means for Your Money

The Spring Statement is the government's mid-year economic update, required by law so the OBR can produce at least two sets of economic and fiscal forecasts per year. Unlike the Autumn Budget — where the Chancellor typically announces tax changes and spending plans — the Spring Statement is designed to be a lower-key affair. Rachel Reeves has explicitly stated this is 'not a budget or a fiscal event', and the government has pledged to limit major fiscal events to once a year in the autumn.

This year's statement carries additional significance for two reasons. First, it is the first time in the OBR's 16-year history that it will publish forecasts without formally assessing the government's progress against its fiscal rules. Second, the OBR is operating without a permanent chair, following the resignation of Richard Hughes after a market-sensitive data breach ahead of the November 2025 Budget.

Despite the low-key billing, investors, mortgage lenders and financial planners will be watching the OBR's updated growth, inflation and borrowing projections closely. These numbers directly influence gilt yield — see the DMO for current gilt data (dmo.gov.uk), part of GOV.UKs, which in turn affect mortgage pricing, and they shape expectations for further Bank of England interest rate cuts.

At the Autumn Budget 2025, the OBR forecast UK GDP growth of 1.3% in 2025 and 1.4% in 2026. Since then, the picture has been mixed. GDP grew by just 0.1% in the final quarter of 2025, suggesting the economy is barely expanding. The OBR's updated forecasts on 3 March will show whether this weakness is temporary or whether growth projections need revising downwards.

Inflation is currently running at 3% — above the Bank of England's 2% target — although it is expected to return to target over the coming months. The OBR will also update its borrowing projections, which will determine whether the Chancellor's fiscal headroom has grown or shrunk.

The Chancellor retained approximately £21.7 billion of fiscal headroom from the Autumn Budget. Economists anticipate this could rise modestly to around £24 billion, thanks partly to lower-than-expected borrowing costs. However, weaker-than-forecast growth or higher borrowing could narrow this buffer. The headroom figure matters because it determines how much room Reeves has for spending commitments at the Autumn Budget later this year — and whether further tax rises might be on the table.

Related reading: See our tax guide · Spring Statement 2026 · Spring Statement 2026

No new tax measures are expected on 3 March. The Chancellor has been clear that she wants to avoid the instability of frequent fiscal interventions, which is why the OBR will not even formally assess progress against the fiscal rules this time.

However, the existing tax landscape for 2025/26 is already weighing on households. The personal allowance remains frozen at £12,570 — the same level since 2021/22 — and the higher rate threshold stays at £50,270 (£12,570 + £37,700). With wages rising due to inflation, more earners are being dragged into higher tax bands through so-called 'fiscal drag'. HMRC has not published updated figures, but the Institute for Fiscal Studies estimated that an additional 4 million people will be paying the higher rate of income tax by the end of the current parliament compared to 2021.

The employer National Insurance rise to 15% (from 13.8%) and the reduction in the secondary threshold to £96 per week (from £175) are already in effect for 2025/26. These changes are not expected to be revisited at the Spring Statement, but the OBR's assessment of their economic impact — particularly on employment — will be closely watched. Some economists have linked the employer NI rise to the recent uptick in unemployment to 5.2%.

For employees, the Class 1 NI rate remains at 8% on earnings between the primary threshold (£242 per week) and the upper earnings limit (£967 per week). Self-employed individuals continue to pay Class 4 NI at 6% on profits between £12,570 and £50,270.

For the millions of UK homeowners on fixed-rate mortgages expiring in 2026, the Spring Statement's growth and inflation forecasts will be critical. Gilt yields — which underpin fixed mortgage pricing — respond directly to OBR projections. If the forecasts suggest weaker growth and lower inflation, gilt yields could fall further, making it cheaper for lenders to offer competitive fixed rates.

The Bank of England has already cut the base rate five times from its peak of 5.25% in August 2023 to 3.75% as of December 2025. Markets are pricing in further cuts in 2026, with many forecasters expecting the base rate to reach 3.25% to 3.5% by year-end. However, this trajectory depends heavily on inflation returning to the 2% target — something the OBR's updated forecasts will help clarify.

For savers, the picture is more nuanced. While falling interest rates mean lower returns on easy-access savings accounts, those who locked in higher fixed rates during 2024 are still benefiting. The current BoE instant access savings benchmark has been declining alongside the base rate. If you have cash savings, the Spring Statement forecasts could signal how quickly rates are likely to fall further — making the case for locking in a competitive fixed-rate bond sooner rather than later.

Remortgaging borrowers should note that even a modest downward revision to growth forecasts could push swap rates lower, potentially opening up better fixed-rate deals in the weeks following the Spring Statement.

The Spring Statement falls just 33 days before the end of the 2025/26 tax year on 5 April. While no changes to ISA or pension allowances are expected, the economic backdrop provides useful context for year-end financial planning.

The annual ISA allowance remains at £20,000 for 2025/26, with the Lifetime ISA bonus available on contributions up to £4,000. The annual pension allowance stands at £60,000 (or 100% of earnings if lower), with the lifetime allowance having been abolished from April 2024. These allowances are use-it-or-lose-it — any unused ISA allowance cannot be carried forward.

The OBR's updated inflation forecasts are particularly relevant for pension savers. The state pension is uprated each April using the triple lock mechanism — the highest of earnings growth, CPI inflation or 2.5%. For April 2026, the uprating will already have been set based on September 2025 data. However, the OBR's longer-term inflation and earnings projections will influence expectations for April 2027 and beyond.

Two minor policy adjustments confirmed for the Spring Statement are worth noting: changes to agricultural property relief for inheritance tax purposes (costing around £150 million by 2029/30) and additional business rates support for pubs (approximately £80 million per year). These do not affect most households directly but signal the government's limited appetite for fiscal changes outside the Autumn Budget cycle.

This article is for informational purposes only and does not constitute regulated financial advice. For personalised advice on your financial situation, consult a qualified financial adviser.

Sources: gov.uk Spring Statement, HMRC tax changes.