Chancellor speaks against backdrop of Middle East war

Chancellor Rachel Reeves has used her Spring Statement to insist she had the “right economic plan” for the UK despite the budget watchdog cutting its growth forecast for this year.

The Office for Budget Responsibility indicated gross domestic product will increase by 1.1% in 2026, down from the 1.4% it forecast in November. But the watchdog upgraded its forecasts for 2027 and 2028 from 1.5% to 1.6%.

Speaking in the House of Commons against a backdrop of conflict in the Middle East, Ms Reeves said: “This Government has the right economic plan for our country, a plan that is even more important in a world that in the last few days has become yet more uncertain.”

She added: “The new forecasts from the Office for Budget Responsibility confirm that our plan is the right one – inflation is down, borrowing is down, living standards are up and the economy is growing.”

The Chancellor told the Commons: “With the unfolding conflict in Iran and the Middle East, it is incumbent on me and on this Government to chart a course through that uncertainty, to secure our economy against shocks and protect families from the turbulence that we see beyond our borders.”

She added: “I want to reassure this House that I am in regular contact with the governor of the Bank of England (Andrew Bailey), with my international counterparts and with key affected industries, including our maritime sector, and tomorrow, I will meet with our North Sea industry leaders to discuss the implications that they face and work with them to manage this uncertain period.

“In an increasingly dangerous world, I am proud to be the Chancellor that is delivering the biggest uplift in defence spending since the Cold War, with £650 million committed in January to upgrade our typhoon fighter jets, a new Royal Navy frigate launched from Rosyth last week, and just yesterday, our £1 billion helicopter deal with Leonardo.

“I am in no doubt about Britain’s ability to navigate the challenges we face.

“The plan that I have been driving forward since the election is the right one – stability in our public finances, investment in our infrastructure including our Armed Forces, and reform for Britain’s economy.”

The Chancellor told MPs her Labour Government has “restored economic stability”, as she pledged to leave families “better off”.

She said: “Stability is the single most important precondition for economic growth, that is why we have committed to a single major fiscal event each year, limiting major policy changes to the budget and giving businesses and households the certainty they need.

“Today, the new forecasts from the Office for Budget Responsibility confirm that our plan is the right one: inflation is down, borrowing is down, living standards are up, and the economy is growing.

“This Government has restored economic stability. The previous government let inflation skyrocket to over 11%, stoked interest rates to 15-year highs, and delivered the first Parliament on record where people were poorer at the end than they were at the start.

“I recognise the impact that had on families. We promised change at the election, and I understand the responsibility on me to deliver that change. I know that the question people will ask themselves at the next general election is this: are me and my family better off? I am determined that the answer will be yes.”

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The Office for Budget Responsibility has “adjusted the profile of GDP so that it grows slightly slower in 2026 and faster in 2027 and 2028”, growing by 1.1% in 2026, 1.6% in 2027 and 2028, and 1.5% in 2029 and 2030, Rachel Reeves said.

She added: “Last year, we demonstrated the resilience of Britain’s economy in the face of global headwinds, with the fastest growth of any G7 country in Europe.

“Today, the Office for Budget Responsibility has updated its growth forecasts, including reflecting lower net migration – average growth across the forecast period is largely unchanged, while the OBR has adjusted the profile of GDP so that it grows slightly slower in 2026, and faster in 2027 and 2028.

“GDP is forecast to grow by 1.1% in 2026, 1.6% in both 2027 and 2028, and 1.5% in both 2029 and 2030. And GDP per capita is set to grow more than was expected in the autumn, with growth of 5.6% over the Parliament, after falling under the Tories in the last Parliament.

“And by the next election, after accounting for inflation, people are forecast to be over £1,000 a year better off.”

Unemployment is set to peak later this year and then drop, the Chancellor said. She told the Commons: “I know that the economy is not yet working for everyone and that the deep economic scars left by the party opposite (the Conservatives) and their mates in Reform are still blighting the lives of too many people.

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“In today’s forecasts, unemployment is set to peak later this year and then fall in every year of the forecast period, ending the forecast period at 4.1%, lower than it was at the start of the Parliament, but young people in particular are still suffering from the aftermath of years of Tory mismanagement.

“In the last five years of the previous government, the number of young people not in education, employment or training (Neet) increased by 113,000, the number of inactive people reached record highs under their government, and over the last decade, apprenticeship starts by young people fell by 40%.

“This Government will not leave an entire generation of young people behind – we are already taking action with additional investment to reform apprenticeships to prioritise young people, and through the £820 million youth guarantee, providing young people with employment support and the guaranteed job.

“And in the coming weeks, I will set out more reforms to undo the Tory legacy of neglect and give young people the support and the opportunity that they deserve.”

Borrowing is set to reduce by “nearly £18 billion compared to the autumn”, with public sector net borrowing expected to fall from 4.3% this year to 3.6% next year, before hitting 1.8% in 2029-30, Rachel Reeves said.

The Chancellor said: “In their forecasts today, the Office for Budget Responsibility show that we are set to reduce borrowing by nearly £18 billion compared to the autumn.

“This year we are set to borrow less than the G7 average, something the Tories never achieved in fourteen years. The forecast today shows that Public Sector Net Borrowing is set to fall from 4.3% this year, to 3.6% next year, then 2.9%, 2.5%, and 1.8% in 2029-30.”

Meanwhile, the Chancellor said she has “confidence” the Government can outperform economic forecasts, as she warned “progress” was opposed by her rivals in the Conservatives, Reform UK, the Liberal Democrats and the Green Party.

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She said: “In the face of global uncertainty, we beat the forecast last year. In the year ahead, the choices that we are making give me confidence that we will beat them again.

“And in the year ahead, more of the choices that we have already made will come into effect – discounts on business energy costs, trade deals with India, the US and the EU, reforms to back our entrepreneurs, investments in our infrastructure, skills funding for further education and more planning reforms.

“Progress – opposed by the Conservatives, opposed by Reform, opposed by the Liberal Democrats, and opposed by the Green Party too, because it is Labour, and only Labour, that has the right plan for our country.

“Our plan for growth is grounded in a profound rejection of the failed economic dogmas of the past, the trickle-down, trickle-out thinking that produced ever diminishing returns for working people.”

Rachel Reeves pledged to rebuild Britain’s credibility, as she told the Commons “if we stick to our plan” there could be an additional £15 billion a year “for the priorities of working people”.

The Chancellor said “headroom against the stability rule in 2029-30 has increased from £21.7 billion to £23.6 billion, with headroom against the investment rule also higher at £27.1 billion and debt is set to be lower in every year of the forecast compared to the autumn”.

She added: “I have never accepted that we have to choose between social justice and fiscal responsibility because there is nothing progressive, nothing Labour, about spending over £100 billion a year – that’s one in every £10 of public money – on servicing debt racked up by the Tories.

“After their disastrous mini-budget, our debt interest rates soared towards the highest in the G7, and since my budget, while average yields have risen for the rest of the G7, yields on UK Government debt have fallen. The Tories squandered Britain’s credibility and my plan is rebuilding it.

“Already, we are expected to spend £3 billion a year less on debt interest by the end of the Parliament than was forecast in the autumn.

“And if we stay the course and stick to our plan, and our debt interest rates return to the G7 average, we will have £15 billion a year more for the priorities of working people and to make working people better off: that is the prize on offer, that is the prize within our grasp.”

Versant Media Group, the newly minted spinout of TV networks and digital assets from Comcast, released its first earnings report Tuesday. 

The company reported full-year revenue of roughly $6.69 billion for 2025, down 5% from the prior year. Versant is reporting a breakdown of its earnings from its final year under the ownership of Comcast’s NBCUniversal. 

Versant’s linear distribution revenue fell 5.4% to $4.1 billion, and advertising revenue declined almost 9% to $1.58 billion. 

Net income attributable to Versant was $930 million, and the company reported $2.18 billion in stand-alone adjusted earnings before interest, taxes, depreciation and amortization. 

For the quarter ended Dec. 31, Versant’s total revenue was down nearly 7% from a year earlier to $1.61 billion, according to a Securities and Exchange filing on Tuesday. Specifically, linear distribution revenue was down almost 6% to $997 million and ad revenue declined 9% to $370 million, while platforms revenue was roughly flat at $202 million.

Stand-alone adjusted EBITDA for the quarter was $521 million, down 19% from the same period last year.

The company’s board also declared a 37.5 cents per share quarterly dividend, which represents an annualized dividend of $1.50 per share, and authorized a $1 billion share repurchase program. Due to its low debt load and high-margin business, Versant executives have said they plan to return value to shareholders. 

“Returning capital to shareholders remains a top priority for us, alongside disciplined investing to support long-term growth,” said Versant COO and CFO Anand Kini during the company’s earnings call on Tuesday.

Versant marked its first day as a standalone company earlier this year, and started trading on the Nasdaq in early January. However, Versant’s management had been working throughout 2025 on the separation of the assets from Comcast. 

The company is made up of a portfolio of pay TV networks including CNBC, MS Now, USA Network, Golf Channel, Syfy, E! And Oxygen, as well as digital properties such as Fandango, Rotten Tomatoes, GolfNow and Sports Engine. 

The traditional TV business, while still profitable, has seen continued losses over the years across all media companies as viewers exit the bundle for streaming alternatives. 

More than 80% of Versant’s revenue leans on the pay TV business, but its executives have told Wall Street that 2026 will be a year of transition for its business model. The company aims to eventually reach 50% of its revenue from digital, platform, subscription, ad-supported and transactional businesses. 

On Tuesday, Versant reported that its non-pay TV revenue reached 19% of total revenue in 2025, with roughly $826 million in platforms revenue. Versant’s platform business — mostly made up of Fandango, GolfNow, Sports Engine and some of the already launched direct-to-consumer businesses — was the only revenue segment to grow revenue year over year. 

In the next three to five years, Versant is looking to increase that share of revenue to 33%, with the goal of getting “closer to 50%,” CEO Mark Lazarus said during the earnings call.

Versant considers its growth drivers in that unit to include MS Now’s upcoming direct-to-consumer product, CNBC Pro and a new retail investor product for the brand, and the launch of the ad-supported Fandango at Home service in 2026. 

“We’re going to continue to report, of course, kind of good visibility in the platforms revenue line, which we think provides a good, meaningful indicator of how that business is scaling,” Kini said.

Disclosure: Versant is the parent company of CNBC.

Veteran broadcast journalist Joan Lunden has detailed in her forthcoming memoir how an early television boss propositioned her, then retaliated professionally when she rejected his advances, illustrating persistent challenges women faced in the industry during her formative years.

In “JOAN: Life Beyond the Script,” set for release March 3, 2026, Lunden recounts the incident from the beginning of her career, before her rise to fame as co-host of ABC’s “Good Morning America” from 1980 to 1997. The former anchor, now 75, describes how one superior made an explicit pass at her, which she firmly declined.

According to excerpts published by People magazine on March 3, the executive responded by undermining her work. “He began to kill my stories,” Lunden writes, explaining that the boss started rejecting her pitches and assignments, effectively sidelining her contributions as a form of punishment for turning him down.

The revelation comes amid Lunden’s broader reflections on sexism, ageism and professional obstacles in television news. She has previously spoken about being pushed out of “GMA” at age 47 in 1997 — a move she has described as tied to a preference for younger talent, despite her strong performance and viewer loyalty. “I was 47 years old. That’s not old. They don’t push men out because they’re 47,” she told Yahoo Life in a 2022 interview.

Lunden’s memoir, her 11th book, offers a candid look at her life beyond the camera, including motherhood, breast cancer survival — she was diagnosed in 2014 and became an advocate — and reinvention in later years. She balances professional triumphs with personal challenges, emphasizing resilience and the evolution of workplace dynamics for women.

The anecdote about the early boss aligns with longstanding accounts of gender-based misconduct in media. Lunden does not name the individual in the published excerpts, and details remain limited to the professional consequences she faced. The story surfaced publicly through People and AOL on March 3, coinciding with the book’s launch and promotional interviews.

Lunden began her career in local news before joining ABC, where she became a household name interviewing presidents, celebrities and newsmakers. Her tenure on “GMA” helped define morning television, blending hard news with lifestyle segments and earning her multiple Daytime Emmy nominations.

In recent years, Lunden has focused on health advocacy, authoring books on wellness and aging, and maintaining an active presence through podcasts, speaking engagements and social media. She frequently discusses empowerment, particularly for women navigating career and family demands. Her daughter Jamie Hess has joined her on platforms like “The Gratitudeology Podcast” to explore family dynamics and personal growth.

The memoir arrives at a time when discussions of workplace harassment remain prominent, years after the #MeToo movement exposed systemic issues across industries, including entertainment and journalism. Lunden’s account adds to voices from her era highlighting unequal treatment and retaliation risks for women rejecting unwanted advances.

Promotional coverage emphasizes Lunden’s optimism and forward focus. In a Woman’s World cover story tied to the book’s release, she reflected on balancing early “GMA” hours with raising seven children, noting how her young daughters would come downstairs to “kiss the TV screen” in the mornings as a way of connecting with her on-air presence.

Lunden has expressed no interest in returning to daily broadcasting, instead embracing reinvention through writing, wellness initiatives and family. She has spoken positively about modern workplace improvements for women while acknowledging progress remains uneven.

The book’s release includes upcoming events, such as a March 10, 2026, appearance at The Temple Emanu-El Streicker Cultural Center in New York, where Lunden will discuss her career barriers and life lessons with moderator Molly Jong-Fast.

As Lunden promotes “JOAN: Life Beyond the Script,” the early-career story serves as a poignant reminder of the personal costs some women paid for professional ambition in male-dominated fields. Her willingness to share it underscores a commitment to transparency and support for future generations in media.

Lunden continues to inspire through advocacy and storytelling, proving that influence extends far beyond any single role or network.

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Netflix Inc. (NASDAQ: NFLX) shares closed at $97.09 on March 2, 2026, up 0.88% or $0.85 from the prior session, extending a recent rally fueled by the company’s decision to abandon pursuit of an acquisition of Warner Bros. Discovery and renewed analyst optimism on its advertising and organic growth prospects.

The stock opened at $95.26, ranged from a low of $95.20 to a high of $98.07, and saw elevated volume of approximately 79.7 million shares. Pre-market trading on March 3 indicated a dip toward $94.92, down about 2.2%, amid broader market caution tied to geopolitical tensions and oil price surges. Netflix’s market capitalization stood near $410 billion, positioning it as a heavyweight in the streaming and entertainment sector.

The recent momentum traces to late February when Netflix confirmed it would not raise its bid in the speculated $83 billion pursuit of Warner Bros. Discovery (WBD), opting instead for capital discipline and focus on internal investments. Shares surged nearly 14% on the announcement day and have gained close to 30% from multi-year lows hit earlier in the period, with four consecutive sessions of advances marking one of its strongest short-term runs in years.

“This walk-away is a win for shareholders,” one analyst noted in a March 2 report. “By preserving cash and avoiding a potentially dilutive mega-deal, Netflix reinforces its commitment to high-return organic growth, content investment and share repurchases.”

Netflix’s strategy shift emphasizes internal content production, with plans to allocate around $20 billion toward films, series and other programming in the coming years. The company continues to prioritize share buybacks as a means of returning capital, supported by robust free cash flow generation.

Recent analyst upgrades have bolstered sentiment. J.P. Morgan’s Doug Anmuth upgraded NFLX to “overweight” with a $120 price target — implying about 25% upside from the March 2 close — citing insulation from AI disruption risks, strong subscriber momentum and accelerating advertising revenue. The firm highlighted ad-supported tier growth, with 2025 ad revenue more than doubling from 2024 to over $1.5 billion and projected to reach approximately $3 billion in 2026.

Consensus 12-month price targets cluster around $113-$114, reflecting moderate bullishness despite the stock’s premium valuation. At roughly 38 times trailing earnings and about 30 times forward 2027 estimates in some models, NFLX trades at levels that bake in sustained double-digit revenue growth and operating leverage.

The company’s fourth-quarter 2025 earnings, released in late January 2026, provided a solid foundation. Revenue reached $12.05 billion, up 17.6% year-over-year and beating estimates, driven by membership gains, pricing actions and advertising expansion. Operating margin improved to 24.5% from 22.2% a year earlier, reflecting efficient scaling.

Full-year 2025 results included revenue of approximately $45.2 billion, up 16%, with the company meeting or exceeding key financial targets. Netflix ended 2025 with around 325 million global subscribers, though specific quarterly adds were not detailed in recent updates.

For 2026, management guided revenue of $50.7 billion to $51.7 billion, representing 12% to 14% growth, with operating margins targeted near 31.5%. Analysts project continued double-digit increases in revenue, operating income, EPS and free cash flow over the next several years, underpinned by potential U.S. price hikes, global expansion and ad-tier momentum.

Challenges persist in a competitive landscape. Rivals like Disney+, Amazon Prime Video and emerging players pressure market share, while content costs remain elevated. Macro factors, including consumer spending caution amid inflation concerns, could temper subscriber additions. Yet Netflix’s first-mover advantage in advertising-supported streaming and differentiated originals provide resilience.

Technical indicators show the stock trading well above its 52-week low of $75.01 but below the high of $134.12 reached in mid-2025. Support levels hover near $95, with resistance around $100. Volatility has moderated in the recent rally, though broader market risks from energy shocks could introduce near-term pressure.

Investors eye upcoming catalysts, including first-quarter 2026 updates expected in April and further details on ad-tier performance. Earnings are slated for mid-April, with focus on subscriber metrics, content slate strength and advertising traction.

Netflix’s trajectory in 2026 balances mature core streaming growth with high-margin emerging segments like ads and potential gaming expansions. The decision to forgo a transformative acquisition has been viewed positively as a sign of disciplined leadership under co-CEOs Ted Sarandos and Greg Peters.

As shares hover near $97, Netflix remains a bellwether for the streaming industry’s evolution, blending content dominance with monetization innovation in an increasingly fragmented media landscape.

The round has been backed by the Development Bank of Wales and the Cardiff Capital Region’s equity fund

The Development Bank of Wales and the Cardiff Capital Region has backed a £7m equity investment into AI life science venture Antiverse. The Series A funding round boost for the Cardiff-based business has also been supported by international investors, led by Prague-based venture capital firm Soulmates Ventures.

Antiverse applies advanced generative AI and machine learning to predict, design and optimise antibody-based drugs. By dramatically reducing the time and cost of traditional discovery methods, it enables pharmaceutical and biotechnology partners to bring life-changing treatments to patients faster and more efficiently. Antiverse’s platform already supports programmes across oncology, immunology and infectious diseases, positioning the company at the forefront of next-generation therapeutics.

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This is the third investment in Antiverse by the development bank since it first provided early-stage seed capital in 2020. The funding will accelerate new intellectual property and expand its local team, with five new jobs created and 19 high- skilled jobs safeguarded.

The deal is the sixth by the Cardiff Capital Region, through its £50m Innovation Investment Capital (IIC) fund, which is managed by Capricorn Fund Managers. The value of the investments by the development bank and the IIC fund have not been disclosed. It is the first time they have both invested in the same investment round.

Murat Tunaboylu, Antiverse’s co-founder and chief executive said of the investment round: “This is a powerful endorsement of both our technology and our roots in Cardiff. This investment not only enables us to scale our platform, grow our team and deepen partnerships with pharma and biotech leaders worldwide, but also positions Antiverse strongly for our next phase of growth. By strengthening our foundations at Series A, we are laying the groundwork for a successful Series B and the opportunity to bring our technology to an even broader global market.

Kellie Beirne, chief executive of the Cardiff Capital Region, a statutory body covering the ten local authorities of south east Wales: “Antiverse is a great example of the kind of cutting-edge innovation we want to see growing in our region. By combining AI with life sciences, the team is tackling some of the most important challenges in healthcare today. CCR is committed to investing in medical tech innovators and we are proud to support a business like Antiverse that is creating global impact from Cardiff.”

Rhian Elston, Wales investment director for the Development Bank of Wales said: “Antiverse represents a compelling life sciences opportunity with the potential to build a business of genuine global scale. By combining deep biological expertise with advanced AI‑led design in a proprietary platform, the company is redefining how antibody therapeutics are developed. We’re pleased to be working alongside Innovation Investment Capital to continue our support for this Welsh‑based tech business as it continues to scale and strengthen its foundations for long‑term growth.”

Expectations of further Bank of England base rate cuts this year have been thrown into doubt after escalating conflict in the Middle East triggered sharp rises in energy prices and government bond yields, raising fears of a fresh inflationary shock.

Only a week ago, markets were confident that the Bank of England would cut rates again at its March meeting, with traders pricing in an 86 per cent probability of a 0.25 percentage point reduction. Now, following military escalation involving the US and Iran and renewed instability across the Gulf region, those expectations have collapsed. Markets are currently assigning less than a 5 per cent chance of a rate cut this month and less than a 50 per cent probability of a move in April.

The Bank’s base rate currently stands at 3.75 per cent, having been reduced four times in 2025 as inflation fell to 3 per cent. Governor Andrew Bailey had previously suggested that a return to the 2 per cent target was “baked in”. However, the geopolitical shock has materially altered that outlook.

UK wholesale gas prices have surged by around 40 per cent in recent days, while oil prices have approached $80 per barrel. Two-year gilt yields have risen to their highest levels since December as markets reassess the inflationary impact of higher energy costs.

The risk, analysts say, is that sustained disruption to global energy supplies, particularly through the Strait of Hormuz, could keep inflation elevated for longer, forcing the Bank of England to pause or even reverse its easing cycle.

Tony Redondo, founder of Cosmos Currency Exchange, said the shift in expectations had been dramatic.

“With 2-year gilt yields hitting December highs due to a 40 per cent surge in UK gas prices and oil nearing $80, the Bank of England faces a significant inflationary shock,” he said. “High-street banks are no longer competing on price but are instead protecting margins against rising swap rates. Buyers may see ‘best-buy’ deals pulled with only a few hours’ notice as lenders move to price in the geopolitical risk premium.”

Swap rates, which underpin fixed-rate mortgage pricing, have risen sharply in response to higher gilt yields. Lenders typically price mortgage products several days in advance, meaning further volatility could quickly feed through into the housing market.

Riz Malik, director at R3 Wealth, warned that the situation could resemble the market turmoil seen in 2022 following Russia’s invasion of Ukraine and the UK’s mini-Budget crisis.

“Last week, the outlook was promising for the 1.8 million mortgages up for renewal in 2026,” he said. “Today, we could see major volatility in the mortgage market with the outlook for further cuts disappearing by the second. If you have a mortgage renewal in the next six months, I would strongly suggest you look at your options and don’t hold off.”

Justin Moy, managing director at EHF Mortgages, said the duration of the conflict would be critical.

“In the short term, any talk of base rate cuts will be null and void,” he said. “If the conflict resolves within weeks, this may be temporary. But if it continues beyond Easter, inflation and base rate expectations will be adversely affected, putting the brakes on rate cuts and pushing deals higher.”

Aaron Strutt, product and communications director at Trinity Financial, said uncertainty was the defining feature of the current environment.

“We do not know what is going to happen yet. Rates could go up, the war might stop and rates drop again as previously forecast. Either way, it makes sense to secure a mortgage rate if you are coming up to remortgage soon.”

Some advisers believe the situation, while serious, differs structurally from the disorderly repricing seen in autumn 2022.

Nouran Moustafa, practice principal at Roxton Wealth, said lenders are better prepared than during the Truss-era turmoil.

“Markets have moved quickly, but mortgage pricing reacts to sustained trends, not single sessions,” she said. “Back in 2022, funding costs moved disorderly and fast. Today’s move looks more like volatility driven by inflation expectations.”

She added that the key question is whether elevated yields persist. “If yields stay elevated for several days, we could see short-notice repricing or selective withdrawals. If this retraces, lenders will prioritise stability.”

The Bank of England now faces a delicate balancing act. While inflation had been easing and economic growth remains fragile, an externally driven energy shock risks reintroducing cost pressures just as policymakers were preparing to loosen monetary conditions further.

If wholesale gas prices remain elevated and oil continues to climb, rate-setters may judge it prudent to delay cuts to prevent inflation expectations becoming unanchored. That would prolong pressure on households and businesses already grappling with high borrowing costs.

For now, the direction of travel depends less on domestic economic data and more on developments in the Middle East. Should tensions subside and energy prices retreat, the easing cycle could resume. But if the conflict deepens or spreads, expectations of multiple rate cuts in 2026 may quickly evaporate.

In the meantime, borrowers and investors alike are being reminded that global geopolitical events can reshape monetary policy forecasts in a matter of days.

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.

Chancellor Rachel Reeves delivered her Spring Statement to the House of Commons under the shadow of escalating conflict in the Middle East and mounting fears of a renewed inflation shock driven by surging energy prices.

In a speech lasting just over 20 minutes, Reeves stressed the importance of “stability in an increasingly uncertain world”, pointing to falling inflation and previous interest rate cuts as evidence that the cost-of-living squeeze on households is easing. However, beyond presenting updated forecasts from the Office for Budget Responsibility (OBR) and criticising opposition parties, she unveiled no new tax or spending measures.

The Chancellor has pledged to hold only one fiscal event each year, the autumn Budget, meaning the Spring Statement was positioned as a forecast update rather than a policy platform.

Growth downgraded for 2026

The OBR has revised down its forecast for UK economic growth in 2026 to 1.1 per cent, weaker than the 1.4 per cent predicted in November. Reeves insisted that the longer-term outlook remains resilient, with growth forecast to reach 1.6 per cent in both 2027 and 2028, slightly stronger than previously projected, before settling at 1.5 per cent in 2029 and 2030.

The downgrade comes amid soft domestic demand, geopolitical instability and renewed energy market volatility following military escalation in the Gulf region. Rising oil and gas prices threaten to complicate the inflation trajectory, particularly if disruption to global supply chains persists.

Unemployment to rise before falling

Unemployment is forecast to peak at 5.3 per cent later this year as weaker labour demand feeds through the economy. The rate is then expected to decline steadily, ending the parliamentary term at 4.1 per cent, lower than at the start.

The Chancellor framed this as evidence that the labour market remains fundamentally strong despite short-term headwinds. However, youth unemployment and business hiring caution remain key concerns across several sectors.

Borrowing falls and headroom improves

The OBR forecasts that borrowing will be nearly £18 billion lower than anticipated in the autumn. Public sector net borrowing is projected to decline from 4.3 per cent of GDP this year to 1.8 per cent by 2030.

Reeves highlighted that fiscal “headroom” against her self-imposed rules has increased from £21.7 billion in November to £23.6 billion. The buffer is designed to reassure financial markets and protect against unexpected shocks.

She also confirmed plans to meet North Sea energy industry leaders to discuss the implications of Middle East tensions on domestic production and energy security.

Night-time economy: “Stability rhetoric won’t save us”

Despite the Chancellor’s emphasis on stability, business leaders were quick to challenge what they described as a disconnect between Westminster messaging and frontline reality.

Michael Kill, chief executive of the Night Time Industries Association (NTIA), said the statement failed to recognise the acute pressures facing hospitality and leisure businesses.

“Across the UK, major brands and corporates are collapsing at pace. Confidence is fragile. Margins are exhausted,” he said.

Kill warned that escalating energy costs, higher National Insurance contributions and ongoing business rates burdens are placing “compounding pressure” on the sector. He called for a VAT cut for hospitality, arguing that targeted intervention would stimulate demand, protect jobs and restore confidence.

With youth unemployment rising, the NTIA stressed that the night-time economy has traditionally provided entry-level employment for young people, and warned that increased employment costs are making it harder to sustain those roles.

Business confidence remains fragile

Separate research from the Zoho Digital Health Study 2026 underscores the cautious mood across UK businesses. Twenty-one per cent of business leaders cited high inflation, recession risk and rising interest rates as their biggest external challenge.

Half of firms reported rising costs per employee over the past year, ahead of a further 4.1 per cent rise in the National Living Wage due in April 2026.

Sachin Agrawal, managing director at Zoho UK, said leaders are prioritising productivity and automation over expansion.

“Businesses want to grow, but they’re doing so more selectively by investing in technologies that deliver clear efficiency gains,” he said.

AI platform Photoroom also urged the government to match pro-entrepreneur rhetoric with tangible digital support for SMEs, arguing that access to AI tools can significantly reduce overheads and increase productivity.

Thames transport: a missed green opportunity

Uber Boat by Thames Clippers said the Spring Statement missed an opportunity to accelerate London’s transition to greener river transport.

Geoff Symonds, chief operating officer at Uber Boat by Thames Clippers, said regulatory reform and green fuel incentives could be implemented at minimal cost.

“Low-key budgets don’t have to mean low ambition for the environment,” he said, calling for parity in green incentives between river transport and land-based networks.

A cautious tone in uncertain times

The Spring Statement was deliberately restrained. Reeves’ strategy is to project fiscal discipline and market stability while preserving room for manoeuvre ahead of the autumn Budget.

However, with energy prices climbing, geopolitical tensions rising and consumer confidence fragile, the path ahead is far from settled. The coming months will test whether stability alone is sufficient, or whether targeted intervention becomes unavoidable.

For now, the Chancellor’s message is clear: hold the line, protect fiscal credibility and hope that inflation continues to fall despite global turbulence. Whether businesses and households feel that stability in practice remains an open question.

Paul Jones

Harvard alumni and former New York Times journalist. Editor of Business Matters for over 15 years, the UKs largest business magazine. I am also head of Capital Business Media’s automotive division working for clients such as Red Bull Racing, Honda, Aston Martin and Infiniti.