Expert comment: Spring Budget

On the economy, Dr Charles Nimoh, macroeconomic expert at the University of Salford, commented: “The Chancellor’s Spring Statement was an opportunity to present a bold economic vision, not just figures on paper. Instead, we were met with political soundbites and no real solutions. Her statement on “not taxing to spend” may sound appealing, but without investment, how does the government plan to drive growth, create jobs or support struggling households?

“This morning’s inflation figures show a drop to 2.8%, edging closer to the Bank of England’s 2% target, but still above it. With inflation cooling, now is the time for a clear plan to stimulate growth - yet today’s statement offered none.

“The welfare reforms risk becoming focused more on cost-cutting than on meaningful change. If the goal is to increase employment, where are the policies to create well-paying jobs, support first-time homebuyers and improve access to affordable childcare?

“Reallocating international aid funding to defence may strengthen national security, but it risks harming diplomatic ties and long-term economic stability. Public services are already under strain, businesses face rising costs, and wage growth remains weak. Without a clear investment strategy, this isn’t a plan - it’s austerity in disguise. The Chancellor says she won’t tax to spend, but the real question is: will she invest to grow?”

On the economy, Matthew Allen, Lecturer in Economics and macroeconomic expert at the University of Salford, continued: “The UK Spring Statement has offered little in the way of optimism for the economy. The Office for Budget Responsibility (OBR) has halved its growth forecast from 2% to just 1%, revealing a fiscal shortfall of over £15 billion. Economic growth remains sluggish, borrowing costs have risen, and the previously anticipated £9.9 billion headroom has been wiped out.

“Chancellor Rachel Reeves now faces the daunting task of balancing the books, with cuts to welfare and departmental spending looming. Those reliant on Personal Independent Payments (PIP) or Disability Living Allowances (DLA) are at particular risk, as many payments could be reduced or even cut entirely. This has raised concerns about the impact on vulnerable individuals who may face additional financial hardship if not properly assessed and supported. Although there has been a boost to Universal Credit (UC) allowances for those on the lowest incomes, this relief has been partly offset by a 50% cut in the UC Health Element and a freeze for new claimants.

“Adding to the economic strain is a £2.2 billion increase in defence spending, amid ongoing uncertainty over the conflict between Ukraine and Russia. The £2.2 billion increase in defence spending adds to budgetary pressure, especially amid sluggish economic growth and rising borrowing costs. While defence spending can support jobs and industries, it also adds to the government’s fiscal challenges at a time when other areas of public spending are being reduced.

“While the US has not yet imposed tariffs on the UK, the threat remains, and global trade disruptions are already pushing up import prices, further squeezing household budgets.

“One of the most contentious domestic issues is the impending rise in employer National Insurance Contributions (NICs) in April, which businesses are already anticipating by reducing overheads and, in some cases, cutting jobs. This move could hit those already struggling to make ends meet, amplifying financial insecurity.

“While inflation has reportedly fallen to 2.8%, offering temporary relief from price pressures, experts warn that this could be misleading given the ongoing risks from trade disruptions and increased employer costs.

“There is some positive news in the form of a £2 billion investment in affordable housing, aimed at constructing social homes to help those priced out of the market. However, the relief from this measure may be overshadowed by broader fiscal challenges.

“Ultimately, the Spring Statement has failed to inspire confidence, and looking ahead to the Autumn Budget, the government will face pressure to implement major fiscal changes to encourage investment, stimulate growth, and maintain the quality of public services. Without bold interventions, the next budget could prove to be a painful test of the Chancellor’s fiscal strategy.”

On housebuilding, Aaron Robertson, Lecturer in Supply Chains, Logistics and Project Management at the University of Salford’s Business School, added: “The government’s ambition to deliver 300,000 homes annually is a step in the right direction, and the mentioned efforts to address planning constraints and the skills gap are welcome.

“However, to genuinely unlock the housing market’s potential, the budget must go beyond targets and address the practical challenges of delivering new homes. First-time buyers need confidence in economic stability, yet rising supply chain costs, increases in defence and welfare cuts may do little to reassure them and enable mobility on the housing ladder.

“We need a fundamental shift in how we build homes, as an increase in volume does not fundamentally address how to unlock capacity or supply chain costs.

“While much of this is a step in the right direction, more focus is required on the mechanisms needed to truly revolutionise housebuilding processes, from investment in the supply chain to strategies that support development at scale, unlock capacity constraints and increase market confidence from first-time buyers.”