Post

resolutionfoundation.orgUnsung Britain bears the brunt • Resolution FoundationThis briefing note analyses the choices the Government has made in the context of an awkward backdrop to the 2025 Spring Statement.

We'll also livepost the key highlights from our overnight analysis of the Spring Statement shortly after 9am. You can read the full 36-page report - Unsung Britain bears the brunt: Putting the 2025 Spring Statement in context - here www.resolutionfoundation.org/publications...

Kicking off our event, @jamessmithrf.bsky.social notes that the starting point for the Spring Statement was weak growth - with GDP growth for 2025 halved to 1%...

...but the OBR has responded by revised up its growth forecast for the remainder of the Parliament. The OBR is now far more optimistic than the Bank of Engand and external forecasters (by £24bn in terms of output in 2029). Will Britain's economic reality catch up with the OBR?

The key changes to the economic outlook was higher interest rate expectations, which in turn increased debt servicing costs by £10.1 billion in 2029-30.

But while borrowing was raised in every year of the forecast...

...policy was tightened (welfare cuts and departmental spending trimmed). Higher borrowing was entirely offset by lower spending, leaving the UK's current balance surplus in 2029-30 back where it was in the Autumn (£9.9 billion).

The £9.9 billion of headroom against the Chancellor's current balance fiscal rule is low by historic standards. The average change between forecasts is £20 billion. So the speculation around tax rises/spending cuts that's dominated the past few weeks is likely to come around again this Autumn.

27/3/25, 9:14 am0 reposts2 likes

The Chancellor has shaved a bit off departmental spending at the end of the Parliakent, but increased it in the intervening years. Real per capita spending in unprotected departments (Home Office, Justice, DWP, Defra etc) in 2029-30 will be broadly in line with 2015-16 funding levels.

Zooming in, real per person spending on unprotected departments such as the Home Office and Justice is due to fall by £8.5 billion (or 1.1 per cent per year) between 2025-26 and 2029-30.

On welfare, here's the good: A long overdue boost to unemployment support via increasing the standard rate in Universal Credit. Though the UK still has one of the lowest rates relative to previous earnings of any advanced economy.