The conflict in the Middle East is now a major factor. The Office for Budget Responsibility (OBR) says it could have “very significant impacts” on the global and UK economy. Oil prices are higher, and markets have reacted quickly.
Why this isn’t a full statement
The Chancellor wants to move towards one main Budget each year. This update gives fresh data from the OBR but avoids a full assessment. That means fewer sudden policy changes and more focus on the numbers.
What the data shows
- Growth is flat, with GDP up only 0.1% at the end of last year.
- Unemployment is rising and now sits at 5.2%.
- Pay growth is slowing, especially in the private sector.
- Inflation is steady at 3% and expected to fall soon.
- Retail sales have picked up after a weaker end to 2025.
OBR forecast
Compared with November:
- Growth for 2026 is lower, but later years look slightly stronger.
- Inflation should fall towards the 2% target faster.
- Unemployment will stay higher for longer.
- Fiscal headroom has improved slightly.
- Borrowing is higher near‑term but improves later on.
- Interest costs are a little lower due to rate expectations.
Global pressure points
Oil prices are currently above the OBR’s assumptions, and gilt yields rose on the day of the speech. Markets no longer expect an interest rate cut this month.
What happens next
There are about eight months until the next Budget. A lot can change in that time. We’ll keep following the numbers and what they may mean for your financial plans.
If you’d like to talk through any of this, we’re here. Just get in touch with your Lync Wealth Management adviser.
The content of this Budget summary is intended for general information purposes only. While we believe this interpretation to be correct, it cannot be guaranteed and may be changed in the future. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. The Financial Conduct Authority does not regulate tax advice.
