The News
The UK’s updated economic growth projection was halved from 2% to 1% in 2025, according to forecasting by the government’s Office for Budget Responsibility.
The country’s finance minister Rachel Reeves tried to strike a more upbeat note about next year’s forecast, however, projecting that it will be faster than the OBR had expected, reaching 1.9% in 2026. The OBR has warned that US President Donald Trump’s tariffs could significantly affect growth.
In her statement, Reeves warned of “a changing world,” as she outlined increased defense spending to 2.5% of GDP to support Ukraine.
Reeves is walking a “tightrope,” analysts argued: If she doesn’t follow through on the promised growth, she may lose public confidence following major tax hikes last year.
