Chancellor of the Exchequer Rachel Reeves announced a reduction in the country's economic growth forecast. The Office for Budget Responsibility (OBR) lowered its expected growth rate for 2026 to 1.1% from 1.4%, projected three months ago.

According to the new baseline forecast, the unemployment rate will peak at 5.3% in 2026, down from 4.75% in 2025. The previous peak was 4.9% in November. The unemployment forecast for 2027 has also been revised downwards. The new estimate is for an increase to 4.9% from the previous 4.6%.

However, these forecasts could quickly become outdated due to the conflict in the Middle East, which has led to a rise in oil prices. This is expected to negatively impact inflation and GDP growth.