Chancellor Rachel Reeves has moved to quell months of economic uncertainty by scheduling an early spring statement for 3 March, tasking the Office for Budget Responsibility (OBR) with preparing fresh forecasts.
A Bid for Stability After Autumn Turmoil
The Treasury announced the date, stating the move prioritises "stability and certainty" for families and businesses. This follows severe criticism of the protracted speculation and leaks in the run-up to November's autumn budget, which business leaders blamed for damaging economic confidence.
Economists argue the previous uncertainty was exacerbated by the Chancellor having limited fiscal headroom against her own rules, making her vulnerable to forecast changes. This period saw a sell-off in UK government bonds, pushing up borrowing costs for the Treasury, companies, and households.
Economic Impact of Previous Speculation
The fallout from the pre-budget period was tangible. The UK economy unexpectedly contracted in October, and the Bank of England projected near-zero growth for the final quarter of the year. Major business groups reported a sharp decline in private sector activity, with many firms freezing investment plans and delaying hiring decisions.
In her November budget, Chancellor Reeves acted to bolster her position, announcing she would more than double her fiscal headroom to £22 billion. This buffer is designed to guard against future economic shocks that could otherwise force painful spending cuts or tax rises.
New Process and Ongoing Scrutiny
The Treasury confirmed the government will respond to the OBR's March forecast with a statement to Parliament, honouring a commitment to hold one major fiscal event per year. Notably, the OBR's spring update will be an interim assessment of the economy and public finances, not a full evaluation against the government's fiscal mandate.
Reeves indicated the forecasts will likely be published before a permanent replacement is found for Richard Hughes, who resigned as OBR chair after November's budget documents appeared online almost an hour before her speech. Both the Treasury and the OBR are also conducting separate leak inquiries following the series of briefings and gaffes.
The 3 March statement is a clear attempt by Labour to reset its economic narrative, providing clearer guidance to markets and businesses after a turbulent start to its fiscal stewardship.
