UK growth forecast cut to 1% in 2025, disappointing SMEs, but wealth sector reacts positively.

From Yahoo Finance: 2025-03-26 12:15:00

The Office for Budget Responsibility has cut the UK’s 2025 growth forecast from 2% to around 1%, putting Chancellor Rachel Reeves in a difficult position. The Spring Statement was a letdown for small and medium-sized enterprises, with 87% of SME business leaders eager to invest. Despite announcements, SMEs are not likely to feel more confident, potentially leading to an economic lag. The statement included cuts to benefits and central government, with markets responding calmly. The Chancellor’s commitment to fiscal rules aimed to reassure investors. The statement also highlighted optimism for future growth and real disposable income. The wealth sector reacts to the Spring Statement, with a focus on innovation-led growth and strategic partnerships in regions across the UK. The Chancellor’s decision not to make changes to capital gains tax, dividend, and ISA allowances was seen as positive for encouraging saving and investment. Despite concerns over inheritance tax changes, the Chancellor’s decision to refrain from further tax changes in the Spring Statement received a positive response. Although the statement included measures to restore fiscal stability, risks remain due to slashed growth forecasts for 2025. The flow of non-doms leaving the UK is expected to continue, impacting future tax receipts.



Read more at Yahoo Finance: UK Spring Statement: the wealth sector reacts