Spring forecast: Reeves insists Labour has ‘right economic plan’ as 2026 growth downgraded

Spring forecast: Reeves insists Labour has ‘right economic plan’ as 2026 growth downgraded Chancellor says she is in close touch with Bank of England governor and is meeting energy companies amid soaring oil and gas prices Business live – latest updates Rachel Reeves insisted Labour has “the right economic plan” for a world that has become “yet more uncertain” as she delivered a spring forecast that downgraded growth for this year. The chancellor was addressing MPs against the backdrop of surging energy prices , as investors fret about the impact of the spiralling conflict in the Middle East. The cost of a barrel of Brent crude was up another 7% on Tuesday, at $83.20. Reeves said she was in close touch with the Bank of England governor, Andrew Bailey, as they monitor the situation and would meet representatives of the North Sea energy industry on Wednesday. She said new forecasts from the independent Office for Budget Responsibility , published alongside her statement, showed that, “inflation is down, borrowing is down, living standards are up and the economy is growing”. “This government has restored economic stability,” she claimed, in a deliberately low-key statement that as expected contained no substantive policy announcements. Reeves conceded that GDP growth is now expected to be “slightly slower” this year, however, down to 1.1% from the previous forecast of 1.4%, after weaker than expected data in the final quarter of 2025 – but stronger in future years, at 1.6% in 2027 and 2028, and unchanged at 1.5% in 2029 and 2020. The OBR also predicts unemployment will rise to a peak of 5.3% this year – but Reeves stressed it is then expected to decline to 4.1% by the end of the forecast period: lower than when Labour came to power. Despite instructing the OBR not to judge her against her fiscal rules at this spring forecast, Reeves stressed that her buffer – or “headroom” – has increased in its latest projections, to £23.6bn from £21.7bn at the time of the November bu...