What to look for in the spring statement

Stability, not surprises

The Chancellor will deliver the Spring Statement on 03 March 2026, earlier than is typical, alongside a new Economic & Fiscal Outlook (EFO) report from the Office for Budget Responsibility (OBR).

This Spring Statement is designed to reinforce stability and credibility, not to deliver major new fiscal announcements. It is positioned as an update, grounded in the Office for Budget Responsibility’s latest forecasts, rather than an event intended to rival the Autumn Budget.

The decision to hold the Statement earlier than usual, alongside a new Economic & Fiscal Outlook (EFO), appears deliberate. After last year’s prolonged Budget speculation unsettled businesses and consumers, the Treasury is clearly seeking tighter control of the narrative and a lower‑drama approach.

That positioning matters because the Chancellor’s room for manoeuvre is extremely limited. Public debt remains historically high, taxes are already elevated, and there is little scope for either significant tax cuts or new spending. While January’s tax receipts were strong, they do not materially change the underlying fiscal picture.

As a result, businesses should expect:

• Few, if any, new policy announcements

• Close alignment with the OBR’s cautious forecasts

• A deliberate avoidance of measures that could unsettle markets or reignite speculation

In this context, tone matters more than content. A tightly controlled Spring Statement focused on reassurance and discipline would be consistent with the government’s stated aim of restoring credibility after last year’s turbulent Budget cycle. For businesses, the key signal will not be what is announced, but what the Statement confirms about the limits of future policy action.

The economic baseline

For businesses, the Economic & Fiscal Outlook (EFO) will matter more than the Spring Statement itself. This is the document that defines the economic baseline - and the constraints within which all policy choices later in 2026 will be made. 

The EFO matters because it:

• Sets the government’s room for manoeuvre by judging whether fiscal rules are on track to be met

• Establishes the central economic narrative the Treasury will rely on in future decisions

• Provides five‑year forecasts that businesses can use for medium‑term planning

For food and grocery businesses in particular, the value lies less in any single number and more in the direction of travel across:

• Household disposable income

• Inflation and wages

• Employment and unemployment

• Energy prices and currency assumptions

Just as important is the OBR’s revisions since the last forecast, which often provide the earliest signals of where pressures are building across consumer demand and supply‑chain costs.

Stabilisation, not recovery

IGD does not expect the OBR to deliver a materially different assessment of the UK economy from its previous report. The overall picture is still one of stabilisation, not recovery.

Key features of the outlook are likely to include:

• Weak growth and fragile momentum, with few signs of a strong upswing

• A particularly subdued consumer backdrop, characterised by:

  • Flat confidence

  • Slowing real earnings growth

  • Retail demand struggling to gain traction

  • Unemployment continuing to edge higher

There is some tentative good news on inflation, which is expected to continue easing. This could:

• Support real spending power

• Strengthen the case for further interest rate cuts

However, the OBR is also likely to highlight new inflationary pressures emerging later in 2026, particularly from policy measures already scheduled to take effect from April, including:

• Business rate changes

• Labour market reforms

• Increases in the National Living Wage

For food and drink businesses, this combination, easing headline inflation but rising cost pressures, reinforces the sense of a challenging and uneven trading environment.