The UK’s 2025 Spring Statement delivers a firm message to investors: growth is back on the agenda. With no new taxes, expanded corporate incentives, and bold infrastructure investments, the government signals a shift from austerity to activation—targeting sectors primed for long-term returns.
Against a backdrop of global economic instability and rising interest rates, the UK Chancellor Rachel Reeves used the 2025 Spring Statement to set a measured but ambitious course for the economy. With updated projections from the Office for Budget Responsibility (OBR), the government doubled down on fiscal discipline while simultaneously unveiling targeted strategies to support enterprise, reform welfare, and foster investment across key sectors.
Maintaining tax stability, the Chancellor resisted calls for immediate increases, leaving inheritance tax, capital gains tax, and dividend thresholds untouched. While this offers near-term certainty, investors should note that potential reforms in these areas remain under discussion. In parallel, a robust campaign against tax evasion will see £1 billion annually raised through strengthened HMRC enforcement, including a 20% rise in fraud prosecutions—underscoring a stricter approach to compliance.
Pensions remain a tax-efficient investment vehicle, with no changes made to the current relief system. Despite industry anticipation of reform details, the government has opted for continuity in this area, preserving valuable benefits for long-term savers and retirement planners.
Although the Statement did not include new cost-of-living measures, the Chancellor reaffirmed the government’s commitment to protecting healthcare, education, and essential services. This will be achieved through public sector efficiency savings rather than increased spending. The OBR projects that inflation will return to the 2% target by 2027, which would help bring borrowing costs back down, aiding both households and businesses.
Corporate tax rates will remain unchanged—a move welcomed by businesses seeking predictability in an uncertain environment. However, this stability comes with heightened scrutiny, particularly for firms with international operations or sophisticated tax arrangements. Enhanced enforcement is set to focus on offshore structures and transfer pricing, requiring greater diligence in tax planning.
The government is pushing forward a pro-growth agenda with a £3.25 billion investment in public sector transformation, creating clear opportunities for private sector collaboration. Simultaneously, the expansion of the National Wealth Fund signals a powerful vote of confidence in sectors such as renewables, technology, defence, and advanced manufacturing. This capital injection is aimed at accelerating high-growth industries that are strategically important to the UK’s future.
Regulatory reform in planning and infrastructure is also on the table, with the OBR forecasting a 0.6% uplift in GDP over the next decade as a result. This change will remove development bottlenecks and fast-track major projects—an encouraging signal for property developers, institutional investors, and infrastructure funds.
On the employment front, a package of welfare reforms is being introduced to encourage wider participation in the workforce, particularly among those receiving long-term sickness benefits. Meanwhile, a £600 million commitment to technical and apprenticeship training aims to bring 60,000 skilled workers into the construction and technical trades—offering businesses a chance to address labour shortages and invest in long-term workforce development.
While the Autumn Budget of 2024 delivered broader reforms, this Spring Statement strengthens the UK’s economic foundation and places a clear emphasis on strategic growth, compliance, and sectoral investment—all critical indicators for investors looking ahead.
Arbuthnot Banking Group PLC (LON:ARBB), trading as Arbuthnot Latham, provides private and commercial banking products and services in the United Kingdom. Founded in 1833, Arbuthnot Banking is based in London, United Kingdom.
