What Rachel Reeves could announce in spring statement

Rachel Reeves has insisted her spring statement will be a quiet affair as she wants the autumn budget to be the sole major fiscal event of the year.

The chancellor's statement, rebranded from the "spring budget", will take place at an unconfirmed time in the afternoon on 3 March and is expected to last just 20 minutes.

Last November's budget was preceded by much speculation, followed by announcements of large tax rises, bringing tax as a share of GDP to an all-time high.

While it is not being considered a "major" event, the spring statement can influence the government over whether to raise or cut future taxes and spending.

Here is everything you need to know:

Why is the spring statement important?

Ms Reeves will outline the latest economic forecasts from the Office for Budget Responsibility (OBR) - which will then be published after the chancellor has delivered her speech.

So, despite it being "low-key", it will still be a critical moment as it will show what effect the last budget and the government's policies have had.

The OBR produces two forecasts a year, which indicate how the economy is expected to perform and if the government is likely to meet the tax and spending rules it has set.

The OBR was thrown into the spotlight at the last budget when it accidentally leaked its assessment, therefore revealing the budget - about 40 minutes before Ms Reeves stood up to deliver her announcement.

This time, following a security review, the Treasury will publish the OBR's forecast on gov.uk, instead of on the OBR's own website.

It will be the first time in the OBR's 16-year history it will not publish a formal assessment of the government's progress towards meeting its fiscal rules, so will not reveal how much headroom the chancellor has.

However, this will be enough for economists to figure out the size of the headroom, which could have an impact on the economy.

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Will Rachel Reeves raise taxes?

The chancellor has said she will not be making any major announcements, but she could make minor changes to tax policy.

However, this could be politically risky as she could then be accused of deploying stealth taxes.

It would also open her up to attacks from opposition parties - and, as seen before, potentially from her own party.

Will the Iran conflict have an effect on the spring statement?

The US/Israel strikes on Iran on Saturday, and continued Iranian counterattacks across the Gulf just three days before the spring statement, are likely to overshadow the chancellor's low-key affair.

Iranian strikes on ships in the Strait of Hormuz, where a fifth of the world's oil and gas passes through, have pushed the price of oil to its highest level in about a year as shipping giants confirmed they will not be passing through the strait and the Suez Canal.

If the attacks continue, this could have significant knock-on effects on inflation, interest rates and commodity prices.

If the key shipping passage remains a no-go zone for a prolonged period, the price of oil could rise further, which could have an effect on petrol pump prices, utility bills, transport and production costs - which, in turn, would put pressure on headline inflation.

And if inflation increases due to the conflict, the Bank of England is less likely to cut interest rates later this month, as the government is hoping for.

Stock markets have already been reacting to the uncertainty, with the FTSE 100 and Asian markets falling on Monday morning. With many Gulf airports closed and oil prices rising, airlines have already been hit hard, which could see people's investments dip.

What is the current state of the UK economy?

Despite inflation falling sharply, the UK economy remains fragile, and inflation (currently at 3%) is still above the Bank of England's target of 2%.

There are also concerns about growth, with the UK's GDP growing just 0.1% in the last three months of 2025 - but it grew by 1.3% over the whole of 2025.

Unemployment has reached its highest level since 2021, increasing to 5.2% in the three months to December 2025. The unemployment rate among 16 to 24-year-olds across that period was 16.1%, the highest since 2014, according to ONS data.

But when it comes to wages, they are continuing to grow, with annual growth in weekly earnings in the last quarter of 2025, excluding bonuses, rising by 4.2%.

There was an increase in tax receipts due to the government previously raising taxes, which created a £30.4bn government budget surplus in January - £15.9bn more than the year before and the highest (without adjustment for inflation) since monthly records began in 1993.

The latest data also shows net migration - which can affect the public finances due to taxes paid and filling workforce gaps, as well as putting pressure on the state - is significantly below the OBR's 2025 forecast.

The provisional figure for 2025's net migration (the difference between the number of immigrants and emigrants) is 204,000, considerably lower than the original forecast of 290,000.

The OBR said if this stabilises or continues to be below forecast levels, this would be "likely to materially hit growth in total GDP and overall tax returns".

(c) Sky News 2026: What Rachel Reeves could announce in spring statement