Mar 26, 2025 07:49 PM
RELATED NEWS: Extra 50,000 children could be pushed into poverty over welfare changes ..... Trump trade war would deal ‘major blow’ to UK growth
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From welfare cuts to Trump tariffs: 7 takeaways from the UK spring statement
https://www.politico.eu/article/rachel-r...fs-growth/
INTRO: For all Rachel Reeves tried to downplay her spring statement Wednesday, it walked and quacked like a full-blown government budget. The U.K.’s top finance minister unveiled cuts to the state, (mostly) grim economic forecasts and the usual boosterish spin of budget time — although tax changes were firmly off the table.
Since her October budget, Reeves has been promising a low-key spring “update” on her search for economic growth from the Office for Budget Responsibility watchdog (OBR). But after the OBR slashed 2025 growth predictions, Reeves’ tight fiscal rules forced her to return with more cuts Wednesday. A full review of three years’ state spending will follow in June.
The chancellor’s silver lining is that — after much twitchiness in the Treasury — the OBR is starting to count positive impacts of her growth pledges, notably on reforms to England’s creaky housebuilding bureaucracy. But 3.2 million welfare claimants will lose out by £1,720 per year in deep cuts to the sickness and disability benefit system, which have worried Reeves’ Labour MPs.
And the slightest change to the economy in future will force her to come back for more. If U.S. goods tariffs of 20 percent kick in next Wednesday, as threatened by President Donald Trump, they could wipe out Reeves’ work at a stroke. She sought to blame “increased global uncertainty” for what the opposition Conservative Party has dubbed an “emergency budget.” (MORE - details)
COVERED:
1) The British economy has growing pains
That means a slight dip in the economy would force Reeves to come back for more tax rises or spending cuts in her autumn budget...
2) But there’s a silver lining (of sorts)
The growth forecast is now higher than previously expected in each year from 2026 [...] But there’s a sting in the tail...
3) Whitehall is getting squeezed again
[...] because some departments such as health are protected, others such as justice and local government may need to be cut by 0.8 percent a year in real terms from 2026/27, according to the OBR...
4) The impact of welfare cuts has been laid bare
It will do nothing to allay their fears. It projects the cuts will push 250,000 more people, including 50,000 children, into relative poverty by 2029/30...
5) There’s hope on living standards — with caveats
[...] nearly all of that growth is expected near the start of the five years, and it will slow to almost nothing from 2027/28. The OBR believes this for several reasons, including the impact of national insurance rises and welfare cuts approved by Reeves herself...
6) Defense is a winner — off the back of sharp aid cuts
Reeves’ balancing act is aided by an accounting quirk in her decision to slash billions of pounds from foreign aid to pour into defense...
7) There’s an orange elephant in the room
All these carefully laid plans could be blown out of the Atlantic by Trump...
- - - - - - - - - - - - - - - - - - -
From welfare cuts to Trump tariffs: 7 takeaways from the UK spring statement
https://www.politico.eu/article/rachel-r...fs-growth/
INTRO: For all Rachel Reeves tried to downplay her spring statement Wednesday, it walked and quacked like a full-blown government budget. The U.K.’s top finance minister unveiled cuts to the state, (mostly) grim economic forecasts and the usual boosterish spin of budget time — although tax changes were firmly off the table.
Since her October budget, Reeves has been promising a low-key spring “update” on her search for economic growth from the Office for Budget Responsibility watchdog (OBR). But after the OBR slashed 2025 growth predictions, Reeves’ tight fiscal rules forced her to return with more cuts Wednesday. A full review of three years’ state spending will follow in June.
The chancellor’s silver lining is that — after much twitchiness in the Treasury — the OBR is starting to count positive impacts of her growth pledges, notably on reforms to England’s creaky housebuilding bureaucracy. But 3.2 million welfare claimants will lose out by £1,720 per year in deep cuts to the sickness and disability benefit system, which have worried Reeves’ Labour MPs.
And the slightest change to the economy in future will force her to come back for more. If U.S. goods tariffs of 20 percent kick in next Wednesday, as threatened by President Donald Trump, they could wipe out Reeves’ work at a stroke. She sought to blame “increased global uncertainty” for what the opposition Conservative Party has dubbed an “emergency budget.” (MORE - details)
COVERED:
1) The British economy has growing pains
That means a slight dip in the economy would force Reeves to come back for more tax rises or spending cuts in her autumn budget...
2) But there’s a silver lining (of sorts)
The growth forecast is now higher than previously expected in each year from 2026 [...] But there’s a sting in the tail...
3) Whitehall is getting squeezed again
[...] because some departments such as health are protected, others such as justice and local government may need to be cut by 0.8 percent a year in real terms from 2026/27, according to the OBR...
4) The impact of welfare cuts has been laid bare
It will do nothing to allay their fears. It projects the cuts will push 250,000 more people, including 50,000 children, into relative poverty by 2029/30...
5) There’s hope on living standards — with caveats
[...] nearly all of that growth is expected near the start of the five years, and it will slow to almost nothing from 2027/28. The OBR believes this for several reasons, including the impact of national insurance rises and welfare cuts approved by Reeves herself...
6) Defense is a winner — off the back of sharp aid cuts
Reeves’ balancing act is aided by an accounting quirk in her decision to slash billions of pounds from foreign aid to pour into defense...
7) There’s an orange elephant in the room
All these carefully laid plans could be blown out of the Atlantic by Trump...