Chancellor Rachel Reeves has vowed to bring about a “new era of security and national renewal” as she delivered a Spring Statement to kickstart economic growth.

Reeves said the government was “taking action to go further and faster to strengthen the UK’s security, to reform the state and to grow the economy”.

She said global economic uncertainty had increased sharply, growth had slowed in many of Britain’s major trading partners and borrowing costs had risen across most advanced economies. 

But despite a “changing world” she said the economy was now forecast to grow faster than expected.

For the infrastructure sector there was positive news. The government’s reforms to the UK’s planning system are set to result in housebuilding being at its highest level in more than 40 years, the Office for Budget Responsibility (OBR) concluded in its forecast for today’s Spring Statement. 

The OBR has forecast that 305,000 new homes a year would be built by 2029/30. Plus it confirmed the government is on track to build an extra 1.3 million homes by the end of this parliament. Reeves said it meant the government was within “touching distance" of its mission to build 1.5 million new homes this parliament.

Announced ahead of the Spring Statement was news government is committing £600m over four years to boost existing training routes. This is expected to deliver up to 60,000 additional skilled construction workers this parliament.

An additional £100m will support 35,000 construction-focused skills bootcamp places with a further £40m for up to 10,000 additional places on new construction Foundation Apprenticeships. There are also plans to build 10 new Technical Excellence Colleges.

Other highlights from the statement included:

• The OBR has revised down growth forecasts for 2025 from 2% to 1%. But it has upgraded its growth forecast for next year and every year thereafter. It predicts GDP growth of 1.9% in 2026 and growth in every year thereafter.
• The OBR forecasts inflation will average 3.2% in 2025, 2.1% in 2026, and hitting the Bank of England’s target of 2% from 2027.
• Planning reforms are forecast to permanently increase GDP by 0.2% by 2029/30 and 0.4% by 2034/35.
• Capital spending would increase by an average of £2bn a year compared to the autumn budget.
• Increasing the defence budget by £2.2bn in 2025-26, taking additional spending on defence to more than £5bn since the Autumn Budget.
• The OBR estimates that last week’s welfare reforms will save £4.8bn from the welfare budget.
• The creation of a £3.25bn Transformation Fund to support the fundamental reform of public services, seize the opportunities of digital technology and Artificial Intelligence (AI), and transform frontline delivery to release savings for taxpayers over the long-term.
• People to be on average £500 a year better off by the end of this parliament compared to under the previous government.

Chancellor Rachel Reeves said: “Growth is the central mission of the government. The government is restoring stability, increasing investment and reforming the economy to drive up prosperity and living standards across the UK.”

The government will set out its plans for spending and key public sector reforms at the Spending Review which will conclude on 11 June 2025.