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Reeves had hoped her statement to the House of Commons would be
a relatively low-key affair, with the forecasts showing the key
economic numbers broadly heading in the right direction.
However, economists are warning that the Iran war could upend
the forecasts within her Spring Statement, depressing growth,
stoking inflation and increasing debt. Perhaps most
significantly, the price of Brent international oil standard has
spiked by more than 15% this week to over $80 a barrel, which if
sustained would certainly lead to higher energy bills and
inflation and keep a lid on growth.
“With the world plunged into fresh uncertainty, she is likely to
strike a highly cautious tone, focusing on maintaining stability
and sticking to fiscal rules amid heightened tensions,” said
Susannah Streeter, chief investment strategist at Wealth Club,
an investment service.
Ahead of her statement, the Treasury said Reeves will stress the
importance of economic stability in an increasingly uncertain
world.
Reflecting on the decisions the government has taken, Reeves is
expected to point to already falling inflation and interest rate
cuts, which are easing the cost of living pressures on family
finances.
“This government has the right economic plan for our country, in
a world that has become yet more uncertain," she is expected to
tell lawmakers.
Britain’s Labour government, which has lost significant support
since it won the general election in 2024 , has been hoping that
2026 would be the year that it was clear the British economy was
on a sounder footing than it has been for years.
Some recent economic indicators have pointed to a pickup in
growth in the early part of 2026. Inflation is also set to fall
sharply in the coming months, prompting the Bank of England to
cut interest rates further. Last month, the bank kept its main
rate unchanged at 3.75%
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