Week in review 19/03/2025 - 26/03/2025

​In the past week, the UK has witnessed significant developments in its financial landscape, culminating in today's Spring Statement delivered by Chancellor Rachel Reeves.​Parliament+19GOV.UK+19The Scottish Sun+19

Spring Statement 2025 Highlights

Chancellor Rachel Reeves addressed the nation's economic challenges in her Spring Statement on 26 March 2025. Key points include:​

• Economic Growth Forecast: The Office for Budget Responsibility (OBR) has halved the UK's growth forecast for 2025 from 2% to 1%, reflecting a more sluggish economic environment than previously anticipated. ​The Guardian+2Sky News+2AP News+2

• Welfare Reforms: The government announced £4.8 billion in welfare cuts aimed at reducing benefit spending. Measures include a 50% reduction in the Universal Credit Health Element and stricter eligibility tests for Personal Independence Payments (PIPs). ​The Sun+3The Standard+3Wikipedia+3

• Defense Spending: An additional £2.2 billion has been allocated to defense, marking the largest increase since the Cold War. This move aims to bolster national and economic security amidst global uncertainties. ​The Guardian+6AP News+6Yahoo Finance+6

• Public Sector Efficiency: Plans to cut at least 10,000 civil service positions were unveiled, with the savings intended to be redirected to frontline services such as policing. ​The Sun

• Taxation: No new tax increases were announced. However, the government plans to tackle tax evasion and improve compliance to enhance revenue. ​The Guardian

• Housing and Planning Reforms: The government aims to relax planning rules to support the construction of over 1.3 million new homes, contributing to economic growth and addressing housing shortages. ​Latest news & breaking headlines+1The Guardian+1

  
  

Other Notable Financial Developments

• Bank of England's Interest Rate Decision: On 20 March 2025, the Bank of England's Monetary Policy Committee decided to maintain the Bank Rate at 4.5%, aiming to meet the 2% inflation target while supporting growth and employment. ​Bank of England

• Thames Water's Financial Crisis: Thames Water faced a significant financial crisis, leading to court approval for an emergency £3 billion funding injection. The company is also exploring equity-raising proposals to stabilize its finances. ​Wikipedia

• FCA's Decision on Diversity and Inclusion Rules: The Financial Conduct Authority (FCA) withdrew plans to implement new diversity and inclusion rules after receiving pushback from City firms and politicians. The decision reflects a preference for alignment with existing government employment policies. ​Financial News London

  
  

  

  
  

These developments underscore the UK's efforts to navigate economic challenges, implement fiscal reforms, and maintain financial stability in a complex global environment.