Spring Forecast: Growth Promised, Rural Gap Persists

The Chancellor, Rachel Reeves, set out the Government’s Spring Forecast to Parliament last week, arguing that the Government’s economic plan is beginning to deliver results, with falling inflation, reduced borrowing and stronger living standards.

According to the Government, the forecast shows inflation falling faster than expected, borrowing down by nearly £18 billion compared with the Autumn forecast, and people expected to be around £1,000 better off per year by the next election after accounting for inflation.

The independent analysis published alongside the statement by the Office for Budget Responsibility (OBR) paints a more cautious picture of the economic outlook. It expects GDP growth of 1.1% in 2026, rising to around 1.6% annually between 2027 and 2030, with inflation returning to the Bank of England’s 2% target later in the decade.

The OBR also notes that the UK economy continues to face structural challenges. Productivity growth remains subdued, while public sector debt has risen significantly over the past two decades and remains close to 95% of GDP in the early 2030s under current forecasts.

Borrowing is projected to fall gradually, while the tax take is expected to reach a historic high of 38% of GDP by the end of the forecast period.

The OBR stresses that the outlook remains uncertain. Risks highlighted include geopolitical instability, trade tensions, energy price shocks, and weaker productivity growth, all of which could significantly alter the economic picture in the coming years.

For rural communities, the wider economic narrative raises important questions about whether growth will be shared fairly across the country.

The Government has repeatedly stated that its economic plan will make “every part of Britain better off.” But analysis by the Rural Services Network finds that the funding gap between rural and urban areas is continuing to widen.

Current projections indicate that in 2026/27 urban councils will receive 32% more per person in Government-funded spending power than rural councils, while rural residents will continue to pay around 17% more in council tax.

This imbalance matters because rural authorities often face higher costs of delivering services due to factors such as distance, sparsity and ageing populations.

If national prosperity is truly the goal, funding must reflect these realities. Growth cannot simply be measured in national averages, it must be felt in the communities where people live.

As the debate around public finances and economic growth continues, ensuring that rural areas are fully recognised in funding decisions will remain essential to delivering prosperity for every person, in every place.