27 Mar 2025
In its initial response to the 2025 Spring Statement, the Institute for Fiscal Studies (IFS) said that Chancellor Rachel Reeves used the Statement to 'fine-tune' her spending plans so that she will continue to meet her fiscal rules.
The IFS said that departmental spending plans and welfare policy have been 'fine-tuned' in order to return to the same amount of headroom the Chancellor previously had.
According to the IFS, there were some 'bright spots' in the Spring Statement, but it noted that, overall, it was a 'holding exercise ahead of the really significant decisions later in the year'.
Paul Johnson, Director of the IFS, commented: 'This was just about the smallest fiscal event Rachel Reeves could have managed in the context of her fiscal rules and the minor forecast downgrade presented to her by the Office for Budget Responsibility (OBR).
'The fact that a fairly run-of-the-mill change to the forecast forced her to cut her spending plans reflects the tiny amount of headroom she chose to leave against her targets last October.'