Spring Statement 2026

 

Sluggish growth while April bills loom large

On 3 March 2026, Chancellor Rachel Reeves delivered the UK Spring Statement, a fiscal update focused on Office for Budget Responsibility (OBR) forecasts rather than major policy shifts. 

Economic growth predictions were downgraded amid global risks like Middle East tensions.

OBR Economic Outlook

OBR forecasts showed GDP growth downgraded to 1.1% for 2026 (down from 1.4% previously) although growth is stronger than expected in future years at 1.6% in 2027 and 2028, GDP per capita up 5.6% over the parliament, borrowing down by nearly £18bn, and fiscal headroom increased to £23.6 billion.

No changes to business rates or high street relief were announced.

High Street Pressures

With less than a month until new changes to business rates kick in, many West End firms and businesses across the country face significantly higher bills without new support. 

Hospitality and leisure sectors face added exposure to energy volatility, with consumer confidence tied to fuel and household costs -  any price spikes could hit margins and spending. 

Unemployment projections worsened sharply: rising from 4.75% in 2025 to peak at 5.3% in 2026 (up from 4.9% forecast in November), remaining at 4.9% in 2027, then easing to 4.1% by 2030. It's already at a five-year high of 5.2%. 

Businesses are also braced for rising employment costs, elevated energy bills, and subdued growth, curtailing hiring, investment, and expansion in high-footfall Central London spots. 

HOLBA Response

Ros Morgan, HOLBA Chief Executive, said: “We are disappointed that the Chancellor did not use her Spring Statement to address the biggest current issue for many businesses, which is the broken business rates system. The bailout already announced for pubs is a temporary sticking plaster solution for one sector. Many other businesses, from hotels to restaurants to pharmacies, are facing totally unsustainable increases in bills under the Government's current plans.

“Labour needs to deliver on what it promised before the election, real rates reform to level the playing field between online businesses which pay little or nothing and high street ones that bear the brunt. There is increasing support for a small levy on online sales, which would enable a cut in over a third in rates for all high street businesses.” 

Action for West End Businesses

Competitive business rates and labour flexibility are vital for Central London resilience. Join our Real Rates Reform campaign to push for lasting change ahead of the Autumn Budget.