UK economic growth forecast cut for this year

The UK economy is now predicted to grow at a slower rate this year than previously expected, the government's official forecaster has said, but subsequent years have been upgraded.

The Office for Budget Responsibility (OBR), which maps out how the economy is set to perform based on the government's tax and spending policies, cut its expected growth rate for 2026 to 1.1% from 1.4% it predicted in last November's Budget.

Chancellor Rachel Reeves announced the figures during her Spring Statement, adding that the OBR expected inflation to slow at a faster pace than previously thought.

However, the forecasts are based on information gathered before the conflict in the Middle East broke out.

Since Israel and the US launched strikes on Iran on Saturday morning and Tehran retaliated, oil and gas prices have risen significantly.

Reeves said that economic growth estimates for 2027 and 2028 had been revised up to 1.6% for both years.