2024 Spring Budget - the economic picture

06 Mar 2024

Within his Spring Budget speech, Chancellor Jeremy Hunt announced that the UK economy is set to grow 'slightly faster than expected'.

According to the Office for Budget Responsibility (OBR), the government's official forecaster, the economy will grow by 0.8% this year and by 1.9% in 2025.

The Chancellor stated that the economy is 'turning a corner', with inflation expected to fall to target next quarter, wages consistently rising faster than prices and better growth than other European countries.

Higher growth gave the Chancellor extra leeway in the Budget, which he used to announce a continuation of the freeze on alcohol and fuel duties; an employee national insurance tax cut from 10% to 8% in April for 27 million working people; and an increase to the High Income Child Benefit Charge from £50,000 to £60,000.

In its latest forecast, which was prepared for the Budget, the OBR said that borrowing will rise in the next financial year, and then remain broadly in line with its previous forecasts.

However, the OBR also warned that the UK's debt will rise over the coming four years before falling in the fifth year. Debt as a proportion of GDP will still be 92.9% in 2028/29, the OBR also forecasted.

The government stated that the measures announced in the 2024 Spring Budget 'will reduce inflation in 2024/25 and bring the equivalent of over 100,000 people into the workforce by 2028/29'.