Overview
Britain's economic outlook for 2026 has been revised down to a 1.1% increase in output, Finance Minister Rachel Reeves said Tuesday during a half-yearly fiscal update. The change reflects an adjustment by the Office for Budget Responsibility to the timing of growth across the medium term rather than a large shift in average expansion over the full forecast period.
Details of the revision
The OBR's latest profile trims the 2026 projection from an earlier estimate of 1.4% that was included in its November outlook delivered alongside the finance minister's second annual budget. Reeves noted that the watchdog has adjusted the shape of GDP growth so that 2026 is weaker than previously expected while the outlook for 2027 and 2028 has been raised.
Under the revised profile, the OBR now forecasts output growth of 1.6% in both 2027 and 2028. Growth is then projected to be 1.5% in each of 2029 and 2030. Reeves said that average growth across the forecast horizon remains broadly unchanged despite the shift in timing.
Context within recent OBR projections
Before this adjustment, the OBR had been forecasting 1.3% growth for 2026; that earlier 1.3% view has now been lowered to 1.1% in the latest update. The downward move for 2026 therefore represents a further trimming relative to the prior intra-year expectation and to the November 1.4% assumption.
Implications and focus
The revision described by Reeves concentrates on when growth will occur rather than changing the OBR's assessment of cumulative medium-term expansion. The half-yearly update therefore signals a slightly softer near-term expansion followed by a modestly stronger pace in the subsequent two years, according to the fiscal watchdog's numbers shared by the finance minister.
Summary takeaway
The government’s fiscal watchdog has reprofiled GDP growth so that 2026 looks weaker at 1.1%, with growth accelerating to 1.6% in 2027 and 2028 and settling at 1.5% in 2029 and 2030. Reeves emphasized that average growth across the forecast period is largely unchanged despite these timing adjustments.