Chancellor of the Exchequer Rachel Reeves made a lack of excitement the star of today's Spring Statement as she said her economic plan was protecting the country from global shocks.
The Labour government has been clear that it wants its main financial announcements to be made in the Autumn Budget, rather than at Spring Statement, in a bid to provide certainty and prevent jitters spreading across financial markets. Reeves to say little new today had widely trailed, a major change from previous spring addresses. That desire had only been strengthened by Israel and the US's attack on Iran at the weekend.
Reeves immediately confronted the topic, using the one new element of the Statement, the Office for Budget Responsibility's latest economic projections for the UK, to show her economic plans were providing an important bulwark.
"We have the right economic plan for our country in an uncertain world, with unfolding conflict in Iran and the Middle East," Reeves said.
Reeves said her economic plan would secure the economy against shocks and protect families from "the turbulence beyond our borders".
In its release, the OBR made it clear that it was too early to predict the economic impact of what was happening across the Middle East but made it clear the projections supplied to Reeves could be swiftly out of date.
"Conflict in the Middle East, which escalated as we were finalising this document, could have very significant impacts on the global and UK economies," the OBR said.
Reeves said the plan that she had been driving forward since the election was the right one. She added her plans include the biggest rise in defence spending since the Cold War, stability in public finances and investment in infrastructure. She added that the government is building growth in every part of Britain, providing capacity in the economy in areas such as increased investment in affordable housing.
But there was little in the way of new detail apart from the OBR update and there was nothing specific for real estate to contend with.
The growth forecasts from the OBR show average growth across the period is largely unchanged.
Gross domestic product per person is now set to grow more than was expected in the Budget in November – with growth of 5.6% over the five-year Parliament. Reeves said Britain’s economy had faster growth than any other European country in the G7 in 2025.
She said the OBR adjusted the profile of GDP so that it grows slightly slower in 2026, and faster in 2027 and 2028. The independent body has downgraded its forecast for economic growth for the year to 1.1% having previously said the economy would grow by 1.3% in 2026.
The OBR shows inflation falling. The government says the decisions the Chancellor took at the last Budget to ease the cost of living, including reducing people’s energy bills by £150 and freezing rail fares, are specifically expected to bring inflation down by 0.4 percentage points in 2026-27.
The forecast shows borrowing is down by nearly £18 billion compared with Autumn.
The lack of news around policy on key issues for real estate, particularly for the housing market and business rates, was a mixed blessing for the industry – a relief and a missed opportunity.
Vanessa Hale, head of research and strategy at BNP Paribas Real Estate, said the Spring Statement was muted as anticipated following the changes of the Autumn Budget.
"For real estate, the more significant story is how the market is adjusting to structural pressures rather than reacting to fiscal measures. The UK property market has moved into 2026 in recalibration mode. Investment volumes proved more resilient last year than many anticipated, underlining that capital continues to back the UK despite political and economic noise."
Hale said that for 2026, BNPPRE is forecasting investment volumes of around £56 billion, representing steady growth on 2025.
"Pricing is more stable, capital is more decisive and confidence is gradually returning."
She said that what needs to happen now is greater clarity and delivery.
"Planning reform must translate into viable development. Energy infrastructure needs to scale at pace to support digital growth. Policy consistency will be critical to unlocking supply. For investors and occupiers alike, the priority is disciplined capital allocation, active asset management and a focus on assets that can deliver resilient income and long-term relevance in a more selective market.”
Georgia Sandom, managing director of flexible office provider Office Space in Town, said: “The Chancellor emphasised the importance of stability and reforms to back UK entrepreneurs during her Spring Statement, yet the reality presents a different picture. She seems committed to her business rates overhaul which will undermine the financial viability of the office sector and force costs onto tenants when they are enforced from 1 April.
"Rachel Reeves claims to support growing businesses, but the likely result of her rates changes is that smaller firms will be pushed into lower-quality workspaces offering less professional support or forced entirely back to working from home. This anti-growth policy will disproportionately hit SMEs and start-ups at the very point they are scaling towards profitability, saddling early-stage firms with higher fixed costs and increasing the risk of failure while deterring entrepreneurship in the UK.’’
Alex Probyn, practice leader, Europe & Asia-Pacific Property Tax at global tax firm Ryan, said the Spring Statement reinforces the reality that the UK is operating in a low-growth environment where investment confidence is critical.
"In that context, business rates policy has an important role to play. Decisions about refurbishment, redevelopment, decarbonisation and expansion are often taken years in advance and depend on clarity, predictability and alignment between tax policy and economic reality.
"The Government now has a genuine opportunity, through its ongoing Business Rates and Investment consultation, to ensure the system supports growth rather than inadvertently constraining it. Investment decisions are forward-looking and capital-intensive. If reform is to influence behaviour, clarity and direction are needed sooner rather than later.
"Sustainable growth depends not only on supporting occupiers, but also on enabling the supply-side investment that delivers modern, compliant and competitive commercial space. Certainty at the point of capital allocation will be essential in the years ahead.”
Jason Tebb, president of OnTheMarket, the CoStar-owned real estate portal, said: “Today’s Spring Budget was as low‑key as many of us were hoping for. After the turbulence surrounding the Autumn Budget, a continued period of clarity and certainty is now what the market needs more than ever. This is certainly a step in the right direction to restoring a sense of stability and rebuilding the confidence among buyers and sellers that drives market momentum.”