If you picked up the next morning’s papers, you could be forgiven for not realising that a ‘fiscal event’ had just taken place.
That is perhaps unsurprising given the escalating conflict in the Middle East. But it may also reflect something else - the event itself passed many people by.
The Chancellor’s Spring Statement was an extraordinarily low-key affair. So quiet, in fact, that even the usual pre-Budget leaks, which reached a new high last year, were entirely absent. As it turned out, there was little to leak. There were no new policies, no relief for the businesses that so need support.
Sitting in the Commons chamber, it was not entirely clear what the purpose of the statement was, beyond offering the Chancellor an opportunity for some rather raw politics (nowadays this also includes some jabs at the Greens).
There was, however, the publication of revised forecasts from the Office for Budget Responsibility (OBR). These gave the Chancellor a few modest crumbs of comfort. Growth projections have improved slightly in the later years of the forecast period (2027–28) – and that I welcome.
But in the near term the picture remains sluggish. Growth for 2026 has been revised down. Unemployment is rising, and most worryingly youth unemployment continues to move in the wrong direction.
That outlook reflects what I hear repeatedly from local businesses. Many are struggling to invest or recruit amid extremely challenging trading conditions. The combined impact of higher employer National Insurance contributions, above-inflation increases in the National Living Wage, and the Employment Rights Act has significantly dampened demand for labour.
Meanwhile, the tax burden is set to reach historic levels. Taxes as a share of GDP are forecast to rise from 34.5 per cent to 38.5 per cent by the end of the forecast period. This is a substantial shift.
Of course, forecasts are only forecasts. They are rarely wholly accurate and can move in either direction. But the broader economic context is deeply concerning.
The sombre backdrop to this statement was the rapidly evolving situation in the Middle East. Strikes on Iran and Iran’s retaliatory actions across the region occurred after much of the OBR’s forecasting work had been completed. The resulting uncertainty is already weighing on global business confidence, and that inevitably affects us here at home. As we have seen before, not least following Putin’s invasion of Ukraine, oil price spikes ripple quickly through the wider economy.
The Chancellor repeated throughout her statement that the government has the “right economic plan.” I could not help recalling the candid text sent by the Health Secretary to Peter Mandelson after the last Budget, claiming the government has “no growth strategy at all.”
One hopes events prove him wrong.