Overview

• The Office for National Statistics reported a 0.3% contraction in April, the biggest monthly fall since October 2023, weakening Reeves’s fiscal projections.
• Rachel Reeves’s spending review guarantees a £29 billion annual boost for the NHS alongside increased defence and schools budgets while imposing real-terms cuts on other departments.
• Treasury documents allocate an extra £113 billion for capital projects such as North-of-England rail links and the Sizewell C nuclear plant within self-imposed borrowing limits.
• The Institute for Fiscal Studies warns that Reeves has only £9.9 billion of headroom against her fiscal rules and that any further economic setbacks will almost certainly force fresh tax rises.
• Local authorities are expected to raise council tax by up to 5% annually—the fastest pace in two decades—to cover funding assumptions built into the spending review.