Overview

• Rachel Reeves announced £4.8bn in welfare cuts, including reductions to disability benefits, projected to push 250,000 people into poverty by 2029/30.
• The Office for Budget Responsibility halved the UK's 2025 GDP growth forecast to 1%, citing global uncertainty and waning confidence.
• Reeves restored £9.9bn of fiscal headroom through welfare cuts, reduced departmental spending, and planning reforms, but risks remain high, with only a 54% chance of meeting fiscal rules by 2029/30.
• Labour faces internal dissent, with backbench MPs and campaigners criticizing the cuts, and a potential rebellion looming in May's vote on the measures.
• The OBR warned that potential tariffs from Donald Trump could eliminate fiscal headroom and reduce GDP growth by 1%, further straining the UK economy.