OBR Revises UK 2025 Growth Forecast to 1%

The Office for Budget Responsibility (OBR) has reduced the UK growth forecast for 2025 from 2% to 1%, prompting Chancellor Rachel Reeves to express her dissatisfaction during her Spring Statement. While the OBR upgraded growth projections for subsequent years, it raised concerns about the government's ambitious targets, indicating that achieving a growth rate of 2.5% may be unlikely. The Chancellor announced significant cuts to public spending, including a voluntary redundancy scheme for civil servants, aimed at saving £3.5 billion by 2029-30. Additionally, tensions within the Labour Party have surfaced due to cuts in welfare, with estimates of savings from reforms being lower than initially projected. The OBR also forecasts inflation peaking at 3.2% this year, which is lower than previous Bank of England predictions. Economists have raised concerns over the effectiveness of Reeves' proposed reforms, suggesting they may not deliver the anticipated economic benefits.