Rachel Reeves sets early March date for spring statement as OBR prepares forecast

"Rachel Reeves has confirmed that she will deliver an early spring statement on 3 March, as the Treasury moves to restore confidence after a year in which prolonged tax speculation was blamed by businesses for weakening the UK economy. In announcing the date, the Treasury said the chancellor had formally asked the Office for Budget Responsibility to prepare updated forecasts for the economy and the public finances."

"Reeves has faced sustained criticism over the months of leaks, briefings and policy kite-flying that preceded the autumn budget, with economists and industry groups arguing that the uncertainty contributed to a downturn in consumer spending and a freeze in private sector activity. Official data later showed the economy unexpectedly contracted in October, while the Bank of England has warned that growth is close to flatlining at the end of the year."

"Business surveys have also pointed to a sharp slowdown in activity around the turn of the year, with firms delaying spending decisions until greater clarity emerged on tax and regulatory changes. Economists said the uncertainty was exacerbated by the limited headroom Reeves initially left against her self-imposed fiscal rules, increasing the risk that even a modest deterioration in the public finance outlook could force further tax rises or spending cuts."

Rachel Reeves will deliver an early spring statement on 3 March. The Treasury has asked the Office for Budget Responsibility to prepare updated forecasts for the economy and public finances. The move aims to provide stability and certainty after months of tax speculation that businesses blamed for weakening the UK economy. Leaks, briefings and policy kite-flying preceding the autumn budget contributed to uncertainty, which economists and industry groups say reduced consumer spending and froze private-sector investment and hiring. Official data showed an unexpected contraction in October and the Bank of England warned growth was near flatlining. Reeves increased fiscal headroom to £22bn and signalled one major annual fiscal event.

Read at Business Matters