Growth Is Still MIA

The Office for Budget Responsibility’s revised growth forecasts, delivered alongside the Spring Statement, made grim reading.

UK GDP growth for 2025 has been cut to 1.0%, half the figure projected just six months ago. The drivers are familiar: weak business investment, stagnant productivity, and the chilling effect of the October Budget’s employer tax increases.

What is striking is the government’s response. Rather than acknowledging that the NI increase has suppressed hiring, Reeves doubled down on the narrative of “inherited chaos,” a line that has surely exhausted its credibility. Businesses do not care about the political provenance of policy. They care about what it costs them to employ people today.

The one bright spot in the statement, a modest loosening of planning rules, pointed in the right direction but remains far too timid. Until the government gets entirely out of the way of the working population of the UK, things are unlikely to improve.

A genuinely pro-growth agenda would combine meaningful deregulation with a commitment to keep the overall tax burden stable, or, even better, reduced.

Until the government grasps that you cannot tax your way to prosperity, expect more OBR downgrades.