Spring Statement offers stability but little boost for SMEs

Chancellor Rachel Reeves delivered her Spring Statement today against a backdrop of geopolitical instability and renewed inflationary pressures, insisting the government has “the right economic plan” to steer the UK through uncertainty.

She framed the Statement as part of “a plan to reshape our economy,” with a focus on long-term reform rather than immediate fiscal intervention.

Central to her remarks were updated forecasts from the Office for Budget Responsibility (OBR). Growth for 2026 has been downgraded to 1.1%, from a previous 1.3% forecast, though the overall trajectory remains largely unchanged. The OBR expects GDP to rise by 1.6% in 2027 and 2028, and 1.5% in 2029 and 2030.

Reeves highlighted falling inflation, lower borrowing and six interest rate cuts since the general election as evidence that “the government’s choices are starting to pay off.” The OBR also forecasts borrowing will be nearly £18bn lower than projected in the autumn. However, unemployment is expected to rise further this year before easing thereafter.

Notably, the forecasts do not yet account for potential inflationary impacts from rising energy prices linked to Middle East tensions.

SMEs: stability, but no fresh stimulus

For many SMEs, the Statement may feel underwhelming.

“The OBR’s latest growth forecast revised down to 1.1% for 2026 is somewhat of a reality check for UK businesses, particularly in light of recent geopolitics,” he said. “While the promise of accelerated growth to 1.6% in 2027 offers optimism in the long-term, we’re not out of the woods just yet.”

Rimmer warned that some firms may adopt a “wait and see” approach, delaying investment decisions until economic conditions improve.

“For most SMEs we work with, that is simply not a viable option,” he said. “A slower rate of economic growth in 2026 is likely to intensify competition across the market. Businesses that continue to prioritise strategic investment will be far better positioned to capitalise when the economy strengthens.”

He added that despite the downgrade, the broader outlook still offers a measure of continuity. “Uncertainty is the enemy of investment and economic growth,” Rimmer said. “Growth may be modest, but it is happening. With inflation easing, 2026 has the potential to become a foundation year that positions UK businesses strongly for the opportunities ahead.”

“The Chancellor’s Spring Statement is unlikely to shift the dial for SMEs that were hoping for fresh measures to unlock growth. With 46% of firms delaying major investment decisions until after today’s announcement, this was an important moment to unlock pent-up investment.”

He added that high operating costs and tax burdens continue to weigh on hiring and investment, warning that “without visible momentum behind small business growth, SME confidence risks remaining stuck in neutral.”

“Today’s absence of targeted SME measures may mean that uncertainty lingers, doing very little for business confidence,” noted Ryan.

“Although geopolitical events and rising oil prices are creating renewed uncertainty in the inflation outlook, the reality for many SMEs is simple: volatility delays decisions and tightens cash flow,” he said.

Smith cautioned that if energy-driven inflation persists, interest rate reductions could be delayed, affecting funding costs and borrowing appetite. “In uncertain moments, pace and clarity matter. SMEs do not need noise, they need decisions.”

While Reeves outlined longer-term ambitions — strengthening European ties, harnessing AI and reshaping regional growth — SMEs may be left waiting for more immediate, targeted support as they navigate a still-fragile trading environment.