What to expect from the Spring Forecast 2026

This year’s Spring Forecast is expected to be exactly that, a forecast, rather than a major fiscal event. The Office for Budget Responsibility (OBR) will publish an economic and fiscal outlook, and the Government will respond with a statement to Parliament. What the Chancellor will cover in that statement is unclear, but with repeated commitments to holding only one major fiscal event per year, we do not anticipate significant fiscal policy changes.

This mirrors the early expectations for the 2025 Spring Forecast, which ultimately evolved into a Spring Statement accompanied by the announcement of policy measures to prevent the Government from breaking its fiscal rules. Though this time round the Chancellor has introduced steps to reduce the likelihood of needing to announce fiscal policy measures; 

• Historically, the OBR assessed whether the Government met its fiscal rules twice a year, in Spring and Autumn. Budget 2025 announced the OBR will now only make this assessment once a year at the Autumn Budget and that the Government will not normally respond with fiscal policy in the Spring. Though this is caveated should there be a significant change to the economic outlook that requires a response.  Whilst there will be no formal assessment, the OBR will still publish the economic and fiscal aggregates used in the rules, so any divergence would likely be apparent.
• At Budget 2025, the Chancellor reduced the risks of a divergence against the fiscal rules occurring, by more than doubled the fiscal headroom to £22 billion, creating a further buffer against unexpected economic shifts. In addition, as only three months will have passed since the last outlook, this will work in the Chancellor’s favour as there is less time for unexpected economic shifts to occur.  The Government has announced tax policy changes since the Budget, notably raising the thresholds for Inheritance Tax reliefs, alongside an expectation that there will be a support package for business rates for pubs (or more widely hospitality) announced in the coming days. The associated fiscal cost will be reflected in the Spring Forecast. However, these measures are not anticipated to significantly reduce the available fiscal headroom. 

Looking Ahead

While major tax changes are unlikely in March, businesses should keep an eye on developments, as the Government has not ruled out fiscal policy changes if there was a significant change to the economic outlook. A Tax Update event is also scheduled for early 2026, at which the Government will announce further changes to simplify and improve tax and customs administration. 

For more information, get in touch with Abby Agopian.