The Office for Budget Responsibility warns that a Middle East conflict could weigh on global and UK growth, potentially lifting inflation through disrupted oil and gas supplies.

OBR trims the 2026 growth forecast based on pre-conflict data, with energy-price spikes from tensions threatening inflation and clouding future BoE rate-cut prospects.

The forecast incorporates energy-market dynamics but notes substantial uncertainty from ongoing Middle East hostilities that could shift inflation and growth paths.

Reeves signals forthcoming reforms to deepen trade ties with the European Union, to be outlined in the coming weeks.

A higher fiscal headroom of £23.6 billion is available for the Autumn Budget, though global risks remain.

Unemployment is projected to peak later this year at 5.2% before easing toward 2030.

Reeves stresses policy predictability and the importance of infrastructure investment, criticizing past inflationary pressures under the previous government.

Labour, elected in 2024, has faced growth revival challenges, with tax increases reflected in two Budgets.

The economy is forecast to grow 1.1% in 2026, with stronger growth projected for 2027–2030.

Budget updates show lower-than-expected inflation and borrowing but still a reduced 2026 growth outlook.

Spring Statement trims 2026 growth to 1.1 amid concerns about Iran tensions and energy-price effects.

Reeves pledges budget stability amid global tensions from the Middle East conflict.