A Pragmatic Budget Amid Economic Challenges
Given the sluggish economic growth in recent months and the looming threat of US tariffs, many expected the Chancellor to deliver an emergency-style Budget. However, she remained committed to her self-imposed fiscal rules, meaning her limited fiscal headroom of £9.9bn was effectively diminished by rising borrowing costs, tariffs, and increased defence spending.
Instead of introducing new tax hikes, Reeves opted to cut welfare spending and reduce funding for unprotected government departments to restore fiscal flexibility.
As a result, there were no major changes to ISAs—though a review is in the pipeline—and no explicit further freezing of income tax thresholds, though they also remain unchanged.
Rather than dwelling on what could have been, let’s focus on what actually happened.
Key Takeaways for Advisers from the Spring Statement
1. It’s the Economy, Stupid
The Office for Budget Responsibility (OBR) has revised its UK growth forecast for 2024 down from 2% to just 1%.
While this downgrade is significant—something the shadow chancellor was quick to highlight, blaming it on Reeves’ policy choices—the outlook for future years appears more optimistic.
