The Chancellor presented the Spring Forecast in Parliament where she spoke on how the government intends to ease living costs while keeping the economy stable. Inflation, borrowing, and interest on national debt are all expected to go down, while investment is rising. Inflation is predicted to return to target in the second half of the year, earlier than forecast in November.
Earlier Budget decisions are helping this outlook. Energy bills were lowered by £150, and rail fares were frozen. These actions are expected to reduce inflation by 0.4% in 2026-27. The Chancellor said her plan protects households against uncertainty and aims to make the economy more secure.
Families will benefit from several policies. Millions of workers will see the minimum wage rise. 30 hours of free childcare will be fully funded, free breakfast clubs are being offered, and the two-child limit on family support has been removed. The goal is to give households extra support while prices adjust.
How Has Borrowing Changed?
Borrowing has gone down by nearly £18 billion compared to the Autumn forecast. This year’s borrowing is expected to be the lowest in 6 years and below the G7 average for the first time in 22 years. Interest on national debt is projected to go down by almost £4 billion next year, allowing more money to go to public services such as the NHS and public transport.
The government has cut unnecessary spending. The money taken from the contingency fund for daily spending is at the lowest level in almost 10 years, showing public finances are being managed carefully. Headroom against the stability rule has risen to almost £24 billion. Education is also seeing extra funding, including £3.5 billion for the Department for Education in 2028-29 and over £1.8 billion for devolved governments through the Barnett formula.
What Does The Forecast Say About The Economy?
The Office for Budget Responsibility predicts GDP per person will grow faster than expected, with 5.6% growth over the Parliament. Britain grew faster than any other European G7 country in 2025. On average, people are expected to be over £1,000 better off after accounting for inflation.
Jon Hope, Interim CEO of CodeBase, said: “In a period of global uncertainty, stability has real value. Today’s Spring Statement signals a steadier approach to fiscal policy – a welcome moment of predictability for founders and investors after years of churn. With inflation easing to around 3% and a historic £30.4bn January budget surplus, there are signs the economic backdrop is beginning to settle.”
He added: “The UK’s startup and tech ecosystem doesn’t need constant new announcements. It needs clarity, consistency and follow-through on pro-growth commitments. Ultimately, the credibility of today’s statement will rest on delivery. Effective economic policy should inform with clarity, educate through transparency, and inspire confidence through action.”
Industry Reactions To Spring Statement 2026
Experts across industries share their thoughts on the recent Statement, and this is what they’ve said…
Our Experts:
Rav Hayer, MD of UK and Ireland and Head of BFSI, Thoughtworks
“Stability on its own doesn’t restart a stalled economy. After years of mismanagement, the UK is still wrestling with a 30% drop in import‑export performance and a prolonged productivity drag. Businesses aren’t waiting for the ‘good times’ to return, because they won’t arrive by themselves. Stability without decisive measures simply preserves stagnation. The UK needs bold levers on productivity, investment, skills and modernisation – otherwise this becomes another year of sitting tight while competitors accelerate.”
Marlon Oliver, SVP EMEA, Flexera
“The UK Spring Statement reinforces a climate of spending restraint at a time when technology estates are more complex than they have ever been.
“Many organisations are running hybrid environments built across multiple SaaS providers and cloud platforms. Contracts signed during rapid growth cycles remain in place, while AI initiatives add new consumption-based cost layers on top. Without strong licence management and cloud cost controls, it becomes difficult to understand true total spend.
“In a constrained year, technology leaders will be expected to show that digital programmes improve efficiency at the estate level, not just at the application level. That means better visibility, clearer ownership of spend and stronger alignment between finance and IT.”
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Sam North, Co-founder and CEO, SCALE
“A “boring” Spring Statement is not what’s needed. Stability is welcome, but now we need acceleration – we can’t just sit tight for another six months.
“The Autumn Budget gave us hope, with the ‘Call for Evidence on Tax Support for Entrepreneurs’. This closed on 28th February and what was needed was an immediate package of measures to help scaleups power ahead.
“The Chancellor has missed a trick by not bringing in new policies today. I fear any momentum will be lost and Britain’s fastest growing small businesses will struggle to have the economic impact we know they’re capable of.
“Skilled people are a vital ingredient required to scale, but building teams has become harder at precisely the moment we need businesses to step up.
“Founders have been clear: simplify the system, reward long-term growth, and make it easier to hire. Time-limited Employer NI relief could transform the outlook for job creation across the SME ecosystem. But the cost per hire has shot up while inflation and tighter margins have reduced room for expansion.
“Extending incentives like EIS/SEIS for follow-on growth rounds seems like another missed opportunity. More deliberate investment is needed into high-growth companies, particularly those led by women and underrepresented entrepreneurs, and when capital markets are cautious, individual investors need a nudge.
“Acceleration won’t come from sitting on our hands until the autumn, as many businesses did last year. It will come from the Government proactively creating conditions for calculated risk-taking and from capital backing ambition. Once these are aligned, we can move beyond stabilising, and start scaling.”
Nishith Rastogi, Founder and CEO, Locus
“Today’s Spring Statement underlines a steady but unspectacular growth outlook and offers little meaningful cost relief for retailers. That leaves businesses grappling with the same challenge as the past year – limited pricing power alongside stubbornly high operating costs.
“When consumer demand grows slowly, retailers cannot easily pass on higher fulfilment or delivery expenses. Those costs have to be absorbed somewhere in the value chain.
“That pressure quickly shows up in fulfilment and delivery economics. In a year of steady rather than strong growth, retailers will pay closer attention to how efficiently orders can move through their networks, because that is where margin can erode fastest.”
Ollie Whiting, CEO, La Fosse
“The Spring Statement was as predicted – cautious, with no major new spending or skills measures announced. This means the implications for employers, tech industry, and the broader workforce come more from what wasn’t announced, rather than what was.”
Implications of the Spring Statement on general hiring confidence:
“Because the Spring Statement maintained a tight fiscal stance, in line with Reeves’ emphasis on maintaining stability in public finances amid global uncertainty, employers are likely to continue prioritising capability growth over headcount growth.
“The underlying economic picture is more nuanced than headlines suggest. January’s record budget surplus, and stronger‑than‑expected tax receipts, show there is resilience in the system. But because that fiscal headroom is not necessarily being used for stimulus or skills investment, employers are unlikely to interpret this resilience as a signal to accelerate hiring.
“Instead, the government’s tight stance reinforces a cautious environment. That typically translates into slower discretionary hiring, longer approval cycles and greater scrutiny on return on investment for new roles.
“That being said, at La Fosse we find that hiring confidence is increasingly shaped by productivity strategy. Boards are asking what capability they need to compete in an AI‑enabled economy, a point that aligns with Reeves’ commitment today to backing economic stability and future growth, not simply how many people they should add to a workforce.
“As a result of the Statement, we are therefore likely to see fewer broad‑based hiring waves and more targeted recruitment in areas such as AI, data, cyber security and automation. Generally, organisations will also continue to prioritise internal upskilling in some of these areas over volume external hiring, to see greater productivity and output from the existing workforce.”
A missed opportunity to boost youth employment:
“Unemployment levels were mentioned in today’s Statement with the OBR’s updated forecast showing unemployment expected to peak and then fall in 2026, yet the underlying challenges, particularly for young people, are yet to be clearly addressed.
“Youth unemployment remains materially higher than the national average, with ONS figures showing 16‑ to 24‑year‑old unemployment sitting in the mid‑teens as a percentage. Reeves has already set out a Youth Guarantee, promising that any young person out of work for 18 months will be offered paid work, an apprenticeship or a college place, but today’s Statement did not expand on that commitment.
“Simultaneously, our experience tells us that businesses are struggling to find AI, data and automation capability – which is important for sustainable economic growth. Although the government’s existing direction of travel on levy flexibility gives businesses greater freedom to use their apprenticeship levy to upskill existing employees, as well as create alternative pathways for early career talent, the absence of new measures today means employers will continue to push for stronger support for AI and automation investment.
“This is where I see huge potential: the introduction of modern, AI‑focused apprenticeships and training routes could simultaneously reduce youth unemployment and close capability gaps. The UK has a real opportunity to improve productivity while broadening access to high‑value careers for young people.
“The Chancellor stated her intention to back innovation and growth in the coming fiscal announcements. AI‑focused apprenticeships could align well with the direction she has signalled – even though they were not included today.”
What Ollie thinks was missing from the Spring Statement:
“Given Reeves’ decision not to introduce new investment incentives today, keeping the Statement deliberately limited in scope, if anything is missing from the Spring Statement for me, it’s a more ambitious productivity agenda linked to capital investment.
“Businesses have already shifted from headcount growth to output growth. Boards are asking us how to deliver more value with the same or fewer people through automation, AI deployment and process redesign. That structural shift is happening irrespective of policy.
“What would materially accelerate UK productivity is stronger and more targeted incentives for capital expenditure, particularly in digital infrastructure, AI systems and automation. The United States has been explicit in backing this transition, both through fiscal incentives and through the sheer scale of private sector investment. This is something I hope to see as part of her commitment to supporting innovation and AI.
“One of the very few clear economic advantages of the UK operating outside the European Union is greater flexibility over fiscal and regulatory decision‑making. That autonomy gives us the ability to move faster and more decisively in support of productivity and investment than many of our peers. From a business perspective, it can be frustrating if that flexibility is not fully utilised.
“If we want to unlock sustained GDP expansion, we need to make investing in productivity‑enhancing technology as attractive as possible. Without that, we risk talking about growth without fully enabling it.”
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Marlon Oliver, SVP EMEA, Flexera
“Today’s Spring Statement reinforces that the government is trying to improve productivity within tight fiscal limits. In that environment, digital investment cannot simply add capability, it has to improve the net cost position.
“Over the past few years, technology spend has risen steadily, particularly across cloud and SaaS. Much of that growth happened quickly, and not all of it has been revisited. When AI programmes are introduced into that mix, they increase consumption and complexity at the same time.
“At a time where departments and businesses are being asked to do more with less, technology budgets will not be ring-fenced from that pressure. AI spending will sit inside the overall cost envelope, and its impact will be judged against the total bill.”
Paul Kenny, Managing Director, Aquatrust
Tech & leadership talent – key to SME growth
“In the world we’re operating in right now, stability is welcome. Most SME leaders I speak to, me included, are focused on keeping our heads down, delivering on our goals, and continuing to progress despite the noise around us. A stable outlook gives us the breathing room to do that.”
“I’ve recently raised with our regional Lord Mayor that the next big shift for SMEs is going to be technological advancement. We need the tools, digital infrastructure and support to be able to compete alongside the big players. Initiatives like digital grants, access to emerging tech, and proper mentoring can level the playing field. If that support is prioritised, SMEs won’t just survive – we’ll thrive.”
For business owners looking for growth levers – what practical options do they have?
“There are two clear levers for growth right now. First, embracing digital transformation, from automation to AI to more efficient systems, can unlock capacity and competitiveness overnight. Many SMEs are only scratching the surface of what this could do.
“Second, investing in leadership and development. We’ve seen the impact of programmes like Help to Grow: Management in our own business. It gives SME leaders the headspace and structure to step back, plan properly, and scale with confidence. For many owners, the challenge isn’t the lack of opportunity but the lack of time to think strategically — these programmes change that.”
“We’ve seen tangible benefits already. Digital improvements have made us more efficient and more resilient, and the learning from Help to Grow: Management has helped sharpen our strategic thinking. It’s reinforced the value of stepping back from day‑to‑day operations to focus on long‑term planning, people development, and scalable systems. That combination, better tech and better leadership capability, has put us in a stronger position for sustainable growth.”
Louise Newbury-Smith, Head of UK&I, Zoom
“The Spring Statement reinforces the Government’s focus on growth and competitiveness, and it is clear that AI will be central to delivering both. But unlocking the full economic benefit of AI depends not just on access to technology, but on equipping people with the skills and confidence to use it effectively.
The Government’s plans to expand AI training across the UK is an important step forward. As AI capabilities become embedded in everyday collaboration and communication tools, fluency in working alongside AI is fast becoming a core workplace competency. The next phase of workforce upskilling will require a deliberate blend of technical capability and human judgment. Employees need to understand how to apply AI in practical settings, whilst critically evaluating outputs and maintaining human oversight.
Organisations also have a responsibility to lead this transition thoughtfully. That means investing in leadership capability, supporting IT teams to drive adoption, and creating a culture where experimentation is encouraged but governance is clear. If the UK is to translate its AI ambitions into meaningful productivity gains, building AI skills at scale will likely prove just as important as investing in the technology itself.”
Rupal Karia, SVP & GM – North America, UKI & MEA, Celonis
“The Spring Statement reinforces the Government’s commitment to delivering stable, long-term economic growth amid a challenging global backdrop. Once again, AI and digital innovation have been positioned at the heart of this ambition, with sustained support for technology firms as drivers of national renewal. When harnessed effectively, AI will play a pivotal role in boosting productivity, sharpening competitiveness and strengthening the resilience of the UK economy.
“Gaining ROI on AI investments is one of the biggest challenges businesses face across the globe. Enterprise AI needs business context to be impactful which is challenging when so many systems that don’t communicate are involved. AI is at its most powerful when it is applied to processes that are transparent, measurable and optimised. Without that foundation, its impact will always fall short of expectations.
“For the public sector in particular, modernising core processes presents a significant opportunity. With substantial productivity gains still untapped, a smarter, data-led approach to how services are delivered could make substantial cost savings, improve resilience and enhance outcomes for citizens. If the UK pairs its technological ambition with a focus on operational excellence, it can turn digital investment into tangible economic advantage.”
James Hall, VP & Country Manager, UK&I, Snowflake
“The Spring Statement saw the Government again demonstrate how it is supporting innovation and strengthening the UK economy through investment in AI and digital growth. If the UK wants to cement its position as a global technology leader though, growth in the digital economy must translate into tangible gains for businesses and communities across the country.
“Policies that encourage responsible AI adoption are important, but success will also depend on the foundations that support it, particularly strong data infrastructure and access to high quality, well governed data. AI systems are only as powerful as the data behind them. By combining the right skills, modern data platforms and clear governance frameworks, the UK can enable businesses to innovate with confidence, improve productivity and remain globally competitive.”
Damian Stirrett, GVP and GM, UK and Ireland, ServiceNow
“The Spring budget is a defining moment for the UK government to fuel productivity and reinforce its commitment to economic growth. It follows several announcements made in the last year about the opportunities for AI to increase efficiency in the public sector and highlights the UK’s ambitions of harnessing such technology to enhance workforce productivity.
NHS waiting lists illustrate the scale and acuteness of the challenge, with ambitious targets to treat 65 percent of patients within 18 weeks by March 2026. This is where the chancellor’s budget can demonstrate tangible action. From reskilling programmes for workers, visible reductions in operational costs, or creating new job opportunities for the AI era, these are just some of the benefits that could be realised, through embracing AI’s full potential.”
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Ian Jeffs, UK&I Country General Manager, Lenovo Infrastructure Solutions Group
“The Spring Statement is a timely reminder that AI and digital innovation are central to this ambition – driving productivity and competitiveness. Adoption is accelerating rapidly across the UK and more widely in Europe. According to the Lenovo CIO Playbook 2026, 57% of organisations in EMEA are approaching or already in late-stage AI adoption, with 93% planning to increase AI investment in the next 12 months. Initiatives such as UKRI’s £1.6 billion AI strategy, designed to drive research breakthroughs and strengthen the UK’s AI capabilities, are a clear example of positive momentum and sustained commitment to innovation.
However, ambition must be matched by readiness. The research shows that while adoption is progressing, only 27% of organisations have a comprehensive AI governance framework in place. To fully realise the productivity gains, organisations need secure, scalable and energy-efficient infrastructure, alongside clear governance and continued investment in digital skills. Ongoing funding for modernisation and responsible AI implementation will be critical in helping businesses translate AI investment into tangible outcomes for citizens, employees and the wider economy.”
Andy Fishburn, Managing Director, Virgin StartUp
“The Spring Statement felt like a missed opportunity to give small businesses much-needed reassurance at a time of continued economic uncertainty. While the ambition to back innovation and strengthen the UK’s reputation as a thriving hub for entrepreneurs is welcome, many founders are still grappling with rising costs, fragile confidence and ongoing cash flow pressures.
“If the government is serious about making the UK the best place to start and grow a business, strategy must now be matched with clear, tangible action. Founders need stability, improved access to finance, and practical support that translates into real confidence on the ground.”
Ash Gawthorp, CTO and Co-founder, Ten10
“Today’s Spring Statement reflects a more cautious economic outlook, with growth for 2026 revised down to 1.1%, even as borrowing falls and fiscal headroom improves. The picture is one of slower near-term expansion combined with tighter financial discipline. The key question now is whether this stability will translate into real productivity gains across the economy.
“The Chancellor also set out an ambition to build growth on a broader and more stable basis, to strengthen global relationships and to go further in backing innovation and harnessing AI so that entrepreneurs and working people benefit across every part of the country. That focus on capacity and regional balance is significant. Long-term competitiveness will depend not only on fiscal discipline, but on whether innovation is embedded across sectors and regions rather than concentrated in isolated areas.
“In a climate shaped by global volatility, tighter capital discipline and increased scrutiny of technology spending, organisations are approaching investment decisions with greater caution. AI spending continues to grow across sectors, yet much of it remains concentrated in pilots or siloed programmes rather than integrated into core systems. Until organisations move beyond experimentation and align AI with enterprise-wide strategy, the productivity gains anticipated at a national level will be difficult to realise consistently in practice.
“Turning uneven growth into sustained productivity means embedding AI into day-to-day operations. This depends on clear guardrails, better use of data, and confidence that systems are reliable and accountable. It also means creating the right conditions for businesses to invest in upgrading older systems, so AI can be deployed consistently rather than in isolated pockets.
“The government has set out a stability-led approach, but success will depend on execution across both the public and private sectors. The focus now should be on turning AI ambition into real improvements in productivity and competitiveness across the economy.”
Greg Hanson, Group Vice President and Head of EMEA North, Informatica from Salesforce
“The Spring Statement focus on growth and stability, isn’t ‘boring’. It is exactly what the economy and businesses need right now. But to drive a growth agenda, we need more clarity on how AI will be deployed at scale across the UK.
“AI has the potential to improve public service efficiency and strengthen private sector performance. But scaling this across the economy requires more than intent. Nearly all (95%) UK organisations say staff require training to use AI responsibly.* Without the workforce capability to deploy and challenge AI effectively, the productivity dividend it promises will remain difficult to secure.
“The Government has already recognised this importance of AI training through its commitment to expand practical AI skills to millions of workers. The challenge now is execution. AI adoption must be matched by AI readiness across the economy. Get that right, and AI becomes a genuine driver of sustained UK growth. Get it wrong, and its economic contribution will fall short of its potential.”
Nick Saunders, CEO, Webull UK
“Whether it’s the need to sound upbeat or the Westminster bubble, British investors are unlikely to share the Chancellor’s optimism with, contrary to the spin, growth in 2026 actually being lower than previously forecast and unemployment yet to peak.
“That said, the evident focus on stability, mitigating the threat of tariffs, reducing borrowing and prioritising defence spending will read particularly well, particularly with the avowed aim to ‘secure the economy against shocks’.
“The real question is whether the immediate threats to inflation brought on by current events will give the Chancellor enough time.”
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