Written Statement: Welsh Government response to the UK Government Spring Forecast Statement 2026

Today, Chancellor of the Exchequer, Rachel Reeves, presented her Spring Statement, accompanied by a new economic and fiscal forecast from the Office for Budget Responsibility (OBR). 

The Chancellor’s Statement confirmed the UK Government’s economic plan is restoring stability to the economy and public finances. This will provide much-needed security against the backdrop of growing geo-political uncertainty.  

The OBR’s latest forecast is encouraging - showing that the UK Government’s plans to stabilise and strengthen the economy are starting to make a real difference resulting in improved living standards and ensuring working people are better off and children are lifted out of poverty. The OBR’s forecast confirmed that inflation prospects are currently better than expected in the Autumn. Productivity, earnings and real household disposable income will increase each year through to 2030. The current budget is expected to be in surplus by £24 billion in 2029-30 creating an important buffer against adverse economic shocks.

These are encouraging signs of a strengthening, credible and resilient UK economy, with benefits expected to be felt across the UK, including in Wales. Wales continues to demonstrate solid economic momentum, including strong recent growth in productivity, increasing faster than the UK average. 

While today’s figures show that labour market conditions present challenges, the Welsh Government continues to focus on improving employment and wage prospects for all age groups across Wales, closing skills gaps, supporting better‑quality jobs, and tackling poverty—prioritising support for those furthest from the labour market.

The Welsh Government will receive an additional £555m in resource and capital funding over the next three years. 

This relates to UK Government spending announcements in England since the Autumn Budget, mainly in respect of Non-domestic rates (NDR) reliefs for hospitality and pubs, and additional funding for Special Educational Needs and Disabilities. It will be for the next Welsh Government to decide how to use this additional funding, taking into account the needs and circumstances in Wales. NDR support has already been confirmed in the Welsh Government Budget 2026-27 approved by the Senedd on 27 January. 

The Chancellor has added to what has already been a period of increased of funding for Wales. The Welsh Government's settlement over the next three years is nearly £6bn higher than it would have been under the spending plans set out by the previous UK Government.

Stability and resilience are vital for long‑term economic growth, and to invest in public services. The recent UK Government investments in Wales, including two AI Growth Zones, £14bn rail infrastructure investment and a defence growth deal, demonstrate two governments, working together to build a strong and secure economy, making a real and tangible difference to the lives of people and families.