Reeves downgrades U.K. growth forecast for 2026 in World Economy News 04/03/2026 British finance minister Rachel Reeves detailed a downgrade to the country’s growth forecasts in a budget update speech earlier Tuesday, even before the events in the Middle East could make an impact. The Office for Budget Responsibility (OBR), the government’s official forecaster, cut its expected growth rate for 2026 to 1.1% from the 1.4% expansion it predicted just three months ago in the Autumn Budget. Additionally, the OBR indicated that its new central forecast is that the unemployment rate rises to a peak of 5.3% in 2026, from 4.75% in 2025, an increase from a forecast peak of 4.9% in November. It has also raised its forecast for unemployment in 2027 to 4.9%, from 4.6% before. “Labor market weakness still appears to be driven primarily by entrants into the labor force struggling to find work amid subdued hiring demand. We expect this weak demand to continue in the near term as output falls further below the economy’s supply potential,” said the OBR, in a statement. This is bad news for the Labor government, and Reeves in particular, as it continues to struggle in the polls, having just suffered defeat in a recent by-election at a previous stronghold in Manchester. “This government has the right economic plan for our country, a plan that is even more important in a world that in the last few days has become yet more uncertain,” Reeves said in her speech to parliament. “It is incumbent on me and on this government to chart a course through that uncertainty, to secure our economy against shocks and protect families from the turbulence that we see beyond our borders.” However, these forecasts may be quickly overtaken by the impact of the U.S.-Israeli war against Iran which has sent energy prices soaring, which will likely have a negative impact on both U.K. inflation and growth. “The conflict in the Middle East has changed the outlook and the risks are that the leap in energy prices will mean U.K. inflation and interest rates are higher than the OBR is forecasting and real GDP growth will be lower. In other words, come the Budget, there is a real risk that government borrowing will be higher and the Chancellor’s headroom will be lower,” according to analysts at Capital Economics, in a note. Source: Investing.com 2026-03-04 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share