Businesses press pause ahead of the Spring Forecast

Chancellor Rachel Reeves is set to deliver the Spring Forecast next Wednesday when the public will be updated on the current state of the UK’s economy. 

This comes after painful news from last year’s Autumn Budget, in which National Insurance Contributions (NICs) were increased for employers, leading to predictions of impending workplace redundancies and forcing many businesses to explore cost-cutting measures to offset financial strain.

While research suggests that many businesses have strong ambitions for the year, the majority are putting major investment decisions on hold until next week’s announcement in the hope that it can bring economic clarity.

What will the Spring Forecast include?

The upcoming Spring Statement will look a bit different to previous years. Next Wednesday will see the publication of the latest forecast from the Office for Budget Responsibility (OBR), as well as a statement from the Chancellor.

However, the Government has committed to holding just one fiscal event each year, meaning few policy changes are expected this month.

It hasn’t yet been confirmed what Reeves will discuss in next week’s statement, but there has been a lot of speculation and predictions over what will be discussed. Most notably, whether the planned increase to employer NICs will go further.

Jamie Morrison, Head of Private Client team at HW Fisher, believes there won’t be any major tax changes for businesses.

“With Labour committing to keeping their main tax announcements in their Autumn Budgets, we’re not expecting any major tax changes in the upcoming Spring Statement,” Morrison says. “As the UK’s tax burden is already at a historic high, it is more likely that spending cuts and reform to public finances will take centre stage.”

Business confidence remains high despite difficulties

While the government’s Autumn Budget left many businesses feeling the pinch, there’s still a strong sense of confidence and optimism for UK startups.

At the end of 2024, a survey by Startups found that 82% of small businesses report feeling optimistic about the future, a significant increase from 27% the previous year.

There’s also a strong ambition for growth. According to research by Bibby Financial Services (BFS), 87% of firms are planning to invest this year. Data from its Q1 2025 SME Confidence Tracker also found that 66% are expecting sales to increase in the next six months.

Our survey delivered similar findings. The data reveals that businesses are focusing more on proactive growth strategies like innovation, market expansion and customer retention, than cost-cutting measures, this year.

Major investments on hold for now

While few changes are expected in the Spring Forecast, uncertainty is pushing businesses to take a step back in their plans, with 48% of SMEs delaying major investment decisions until after the Chancellor’s speech, BFS’s research found.

The aftermath of the Autumn Budget can’t be ignored either, as more than half (52%) of businesses reported that they’re less likely to make short-term investments, primarily because of the rise in NICs. 

Moreover, the number of businesses with no investment plans has increased to 13% — an increase from 8% in Q3 2024.

Derek Ryan, UK Managing Director at BFS, comments: “UK businesses are showing a clear appetite to invest, but many are taking a wait-and-see approach ahead of the Spring Statement.

“Business leaders are craving stability before they deliver investment plans. Without this, the government’s plan to kickstart economic growth is at risk.”