Chancellor Rachel Reeves’ Spring Forecast has provoked a predictably diverse reaction.
She admitted that growth in the UK economic in 2026 will be less than previously expected.
The Office for Budget Responsibility (OBR) predicts economic growth for this year will be only 1.1% – it has previously forecast the economy would grow by 1.3% in 2026.
The OBR expects economic growth to pick up in following years: to 1.6% in 2027 and 2028, and then 1.5% in both 2029 and 2030.
Reeves also admits unemployment is forecast to peak in 2026, and then fall every subsequent year until 2029.
She says it will “end the Parliament at 4.1% – lower than it was at the start”. Unemployment for the last quarter of 2025 was 5.2%, the highest level in years.
However, the forecasts don’t take into account the impact on energy prices and economic turbulence caused by the Iran War.
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In response James Bentley at Financial Markets Online comments: “Her speech has been completely overtaken by events.
“… With the UK stock markets a sea of red, encouraging economic forecasts and a Chancellor in self-congratulatory mood count for little.
“The Pound picked up against the Euro, but both the FTSE 100 and FTSE 250 barely moved following her speech.
“Two big questions remain – how far will equities fall, and will the surge in oil and gas prices nix any chance of interest rate cuts in the coming months?”
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Sam Kirtiker, chief executive of The Mortgage Broker Group, states: “For the mortgage industry, these calmer waters encourage rate switches and remortgages, which in turn encourage competition and put more pressure on lenders to deliver faster, smoother processing and more sustainable affordability.
“What was really missing today was anything that tackles the root problem in housing, and the fact that we still don’t build enough homes in the places people need them.
“Mortgage rates can move up and down, but if supply stays tight, it keeps prices and rents under pressure.”
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Vanessa Hale, Head of Research & Strategy at BNP Paribas Real Estate, says: “We are operating in an environment of constraint. Vacancy rates remain low across many sectors, development pipelines are restricted by viability and planning friction, and regulatory evolution continues to shape investor decision making.
“For 2026, we are forecasting investment volumes of around £56 billion, representing steady growth on 2025. Pricing is more stable, capital is more decisive and confidence is gradually returning.
“What needs to happen now is greater clarity and delivery.
“Planning reform must translate into viable development. Energy infrastructure needs to scale at pace to support digital growth. Policy consistency will be critical to unlocking supply.
“For investors and occupiers alike, the priority is disciplined capital allocation, active asset management and a focus on assets that can deliver resilient income and long-term relevance in a more selective market.”
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Rightmove’s Colleen Babcock adds: “It was always expected to be lower‑key, and the lack of headline‑grabbing announcements should help give movers more confidence and certainty right now.
“Looking ahead to the Autumn Budget, which is the government’s big opportunity for policy change this year, we’d really like to see stamp duty properly looked at.
“The current bandings haven’t kept up with house prices, and as a result less than half of homes in England are now stamp‑duty free to first-time buyers, falling to just one in ten homes in higher‑priced regions like London.
“For most movers, the tax is unavoidable, and it can be a real deterrent, particularly for those at the top of chains considering a downsized move.
“With around seven or eight months to go until the Autumn Budget, there’s time for the government to give some serious thought about how the system could be improved.”
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Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “The Chancellor hasn’t delivered any encouragement for first-time buyers, who are the engine room of the housing market and enable transactions to be unlocked further up chains.
“There was nothing in terms of stimulating more new housing or any detail as to how she plans to increase transactions, which are not only good for the property industry but also job and social mobility, as well as keeping house prices in check.
“While the Spring forecast is unlikely to choke off recent increases in home buyer and seller confidence, what happens in the Middle East – with its potential to increase inflation and keep interest rates higher for longer – may have more of an impact.”
