The spring update, explained
What the spring economic update means for your planning, and where to find the facts behind the headlines.
The useful detail
An economic forecast helps frame a business plan. It does not set the tax treatment of an individual transaction, or guarantee your sales, costs or borrowing rate.
The OBR projected UK real GDP growth of 1.1% in 2026, down from the 1.4% it had forecast in November 2025. It expected growth to average 1.6% a year from 2027 to 2030.
Use a cautious sales scenario alongside your main forecast. Check how delayed customer payments would affect your cash balance.
The OBR expected inflation to reach the 2% target in late 2026. This was a projection made in March, with uncertainty around energy, trade and financial markets.
Review your own supplier, rent and wage costs. A national inflation forecast is not a promise that an individual business’s costs will fall.
The OBR highlighted a wide range of possible outcomes, including risks from conflict in the Middle East, productivity, interest rates and trade policy.
Keep an achievable cash reserve and review loan renewals and major purchases against more than one scenario.
HCA planning checklist
Separate expected sales from cash you will actually receive. Add the dates of tax payments, loan repayments and planned spending.
Use the current tax-year rates and HMRC guidance. Do not assume a spring forecast changes your payroll settings or existing filing obligations.
Bring your expected profit, salary, dividends and major spending plans to your accountant so the personal and business picture can be considered together.
Keep plans flexible ahead of the Budget scheduled for 28 October 2026. A confirmed event date does not confirm any tax measures.
Read it at source
Forecasts, policy announcements and legislation serve different purposes. For decisions, confirm the current rules, effective date and eligibility with the official guidance and your adviser.
What does it mean for you?
We’ll help you work through the accounting and tax questions behind your next decision.
