As wealth managers prepare for the Spring Statement tomorrow, speculation is mounting over what Chancellor Rachel Reeves will deliver.
While not an official fiscal event as such, the statement will offer key insights into the government’s economic outlook and provide updated forecasts from the Office for Budget Responsibility (OBR). With wealth managers, businesses, investors, and homeowners eager for clarity, leading voices in finance and economics have shared their expectations and concerns ahead of the statement this week as follows:
Paul Clifton, Wealth Planning Director at Arbuthnot Latham kicks things off for us, exploring the potential fiscal measures, economic forecasts, and government priorities in this pivotal update as follows below:
“Recent data from the Office for National Statistics reveals that the UK economy experienced minimal growth of just 0.1% in the final quarter of 2024, following stagnation in the previous quarter. Additionally, the Bank of England has revised its growth forecast for 2025, lowering expectations from 1.5% to 0.75%, signalling a slowdown in economic momentum.
“These headwinds are likely to shape the tone and content of the Spring Statement.”
Potential announcements in tomorrow’s Spring Statement according to Clifton might be:
- Spending cuts over tax rises:
“Reports suggest that the government may lean towards spending cuts rather than introducing new tax hikes. Welfare cuts, Whitehall efficiency measures, and planning reforms are among the areas being considered.
“The Spring Statement may include extensions to the freeze on income tax and National Insurance thresholds, potentially lasting beyond 2028-29, to raise additional revenue. Speculation also surrounds possible changes to inheritance tax thresholds and ISA contribution limits to address fiscal challenges and encourage savings. These measures aim to balance economic stability with long-term fiscal discipline.
- Support for businesses:
“While businesses have faced challenges such as increased National Insurance contributions, there is speculation about potential relief measures. These could include adjustments to the Employment Allowance or targeted support for sectors like agriculture and charities.
- Infrastructure and growth initiatives:
“The government’s ambition to create ‘Europe’s Silicon Valley’ between Oxford and Cambridge may feature prominently. This initiative aims to boost the economy through infrastructure improvements and streamlined planning regulations.
- Fiscal discipline and long-term planning:
“The Chancellor is expected to emphasise fiscal discipline, balancing short-term borrowing needs with long-term economic stability. This may involve revisiting controversial tax policies introduced in the Autumn Budget, such as inheritance tax reforms.
Balancing act: Anticipating changes and challenges in the upcoming Spring Statement
“Many of Rachel Reeves’ policies announced in the October budget have faced significant backlash. While there is pressure on her to reconsider certain measures, such as the inheritance tax on business assets and changes to National Insurance contributions, the overall sentiment leans towards scepticism about any major reversals. Financial analysts and investors express cautious optimism, acknowledging the delicate balance the government must maintain to foster investor confidence.
“Any changes to tax policies, such as inheritance tax or capital gains tax, may impact high-net-worth individuals and their financial planning strategies. Additionally, any measures aimed at stimulating economic growth could influence investment opportunities and market dynamics.
“As we await the Chancellor’s announcements, staying informed and proactive will be key for navigating the evolving economic landscape. The Spring Statement promises to be a pivotal moment, offering insights into the government’s priorities and the direction of the UK economy in the months ahead.
More economic forecasts in focus
One of the most anticipated aspects of the Spring Statement is the OBR’s revised economic projections.
On the agenda for Tom Stevenson, investment director, Fidelity International, is patching up the public finances as he comments: “Rachel Reeves, the Chancellor, will stand up on Wednesday to give one of her more difficult speeches. Her first Spring Statement is a follow up to last autumn’s unpopular tax-raising first Budget.
“Six months ago, she left herself almost no wriggle room to hit her self-imposed fiscal rule limiting public spending to the amount the government raises from taxes by the 2029/30 tax year.
“She had a £10bn buffer but sluggish growth, lower tax revenues and higher borrowing costs have wiped that out. The Office for Budget Responsibility will estimate this week that she is £4bn short of what she will need in four years’ time. To plug that gap and rebuild the cushion she will need to find £15bn. And because she has vowed not to raise taxes again, just half a year after the last tax bombshell, she will have to do that through spending cuts.
“The government has already announced £5bn of welfare spending cuts, so Wednesday will see her outline the other £10bn. Some will come from redirecting overseas aid to capital spending on defence, which falls out of remit of the current spending rule. Better tax compliance will find another billion or so. But that will still leave around £7bn of cuts to Whitehall departments, including thousands of civil service job losses. It won’t be called austerity, but it will certainly feel like it.”
Tony Whincup, Head of Investment Specialists, at TrinityBridge said: “Chancellor Rachel Reeves is expected to announce a range of spending cuts in this week’s Spring Statement. The news that government borrowing last month was higher-than-expected may jeopardise Reeves’s attempt to stick to her self-imposed fiscal rules: not to borrow to fund day-to-day public spending and to have debt as a share of UK GDP falling by the end of the current parliament in 2029/30. Some announcements were trialled last week, with Work and Pensions Secretary, Liz Kendall, earmarking changes to the welfare system which may save £5bn by the end of 2030. The challenging political choices for the government are clear to see; prime minister, Keir Starmer, has already announced cuts to the international aid budget in order to increase defence spending, as well as the decision to abolish NHS England in order to improve efficiency. The latest forecasts from the government’s fiscal watchdog, the Office for Budget Responsibility (OBR), will be set out to Parliament at Wednesday’s Spring Statement, with estimates of current tax receipts and public spending feeding into its forecast of whether the government is likely to keep to its fiscal rules. At the time of the Budget in October, the OBR models suggested that Reeves had c.£9.9bn headroom against her borrowing rules, however this is now expected to have been eroded completely.”
Concerns from Entrepreneurs and SMEs
For entrepreneurs and small businesses, the Spring Statement presents an opportunity to reassess tax policies and economic incentives. Jamie Roberts, Chief Investment Officer at YFM Equity Partners, voices concerns over the government’s approach to Capital Gains Tax (CGT).
“The Autumn Budget left a sour taste for many entrepreneurs,” Roberts states. “The rise in CGT not only increases the cost of success but also widens the retirement funding gap. Many business owners reinvest profits rather than saving for pensions, and these tax hikes threaten their long-term financial security.”
Roberts warns that discouraging entrepreneurship through higher taxes could stifle investment and innovation. With SMEs accounting for 60% of private sector jobs, he argues that the government must rethink CGT increases and introduce fairer incentives for those building and exiting businesses.
Sharing her thoughts on what might be in store for SMEs, Hannah Fitzsimons, CEO of Cashflows said: “Small businesses are the backbone of the UK economy, but in 2025 so far, the financial landscape is becoming increasingly challenging. The funding gap for SMEs is widening, and we’re seeing alarming statistics: 40% of SMEs have been forced to pause operations due to a lack of finance, while over a third face the risk of closure. With traditional lenders tightening their purse strings and economic uncertainty persisting, business owners must explore alternative funding solutions to secure their future.”
“We didn’t see much relief for the UK’s companies, big or small, in the last budget, and there hasn’t been any indication that it will come in the next. The UK government has limited options to manage current challenges other than cutting expenditure, and this means that the relief that the country’s small businesses need may not be coming. One of the key things that businesses need is funding: companies need it to start in the first place and to keep going through difficult times.”
“The impact of inadequate funding is far-reaching. It not only threatens business survival but also stifles innovation, limits job creation, and hinders economic progress. As SMEs brace for financial pressures throughout this year, it’s imperative that they have the right support and funding tools to navigate these turbulent times. At Cashflows, we remain committed to empowering businesses with smarter, more accessible financial solutions—because when SMEs thrive, so does the wider economy.”
Fiscal rules and spending constraints
Richard Flax, Chief Investment Officer at Moneyfarm, outlines the government’s fiscal rules and their implications. Under current Treasury guidelines, day-to-day spending must align with revenues by 2029/30, and public debt must decline as a percentage of GDP.
“The OBR is likely to downgrade its economic growth estimates, mirroring similar moves by the US Federal Reserve,” Flax explains. “This will present challenges for the Chancellor, who has already made tough spending cuts to meet fiscal targets.”
While some argue that these rules should be revised, Flax notes that credibility in financial markets is crucial, particularly in light of the market turmoil seen under Liz Truss’s administration.
The broader economic picture
Rebecca Harding, Chief Economist at DSR Bank, underscores the evolving economic threats facing the UK. She calls for a shift in funding strategies to address underinvestment in critical infrastructure, particularly in defense and security.
“The fiscal constraints facing Rachel Reeves are significant, but the economic landscape has changed drastically in the past six months,” Harding says. “We need innovative funding solutions that won’t spook markets but will address long-term investment shortfalls.”
She advocates for the government to support multilateral financing structures and bolster national investment programs to ensure economic resilience.
Marc Acheson, Global Wealth Specialist at Utmost Wealth Solutions, said: “It is now looking increasingly likely that Rachel Reeves will opt for spending cuts rather than tax rises. However, with the OBR slashing its forecasts, this may have all but wiped out the Chancellor’s fiscal headroom. This leaves the door open to more tax rises in the Autumn if growth remains anaemic and spending cuts alone aren’t enough to meet her fiscal rules.
“Most concerning though is that the UK may have already reached a tipping point in wealth outflows which will impact tax receipts. Ever since the measures announced in the Autumn Budget that removed IHT protections on existing settlements, non-doms and HNWs have been leaving to more attractive destinations such as the UAE, Italy, Switzerland, Portugal, Greece who are competing aggressively to welcome families through a combination of flat taxes and lack of IHT. With no reversal or changes to these measures, more non-doms and HNWs will exit at a greater rate than average in the coming years.
“Conversely, one interesting trend that we are starting to see develop is HNWs coming from the US, which goes against perceived wisdom given the US administration is seeking to lower taxes on HNWs.”
Conclusion
While tomorrow’s Spring Statement seems unlikely to introduce major policy changes, it will provide crucial economic forecasts and set the stage for future government decisions. From housing and business tax policy to public spending and infrastructure investment, the outlook presented by Reeves will influence market confidence and economic planning for months to come. With the Autumn Budget looming and the global uncertainty at heightened levels, all eyes will be on the government’s next steps in shaping the UK’s economic future.
Check in with us tomorrow for live updates and expert analysis!
We’ll be covering all the latest news and views during and after the Spring Statement tomorrow afternoon, here on Wealth DFM. So, to keep wealth managers posted with the latest news and views just check in with us here tomorrow using this dedicated Spring Statement section of our website. See you then!
