OBR in the news as UK forecasts wobble amid war shock and borrowing jumps. Independent budget forecaster, funded by Treasury since 2010.
As of early April 2026, US 30-year fixed mortgage rates have climbed to 6.37%, up from under 6% six weeks ago, driven by the Iran war's impact on energy prices and inflation fears. This rise is slowing US home sales and mortgage applications during the spring buying season. In the UK, house prices fell 0.5% in March, slipping below £300,000, with mortgage rates rising above 5%, signaling a cooling housing market.
UK house prices increased by 0.3% in February, with annual growth steady at 1%. The market remains resilient ahead of the spring forecast, avoiding the negative speculation seen before last November’s budget. Economists expect continued recovery, supported by improved affordability and mortgage availability.
On March 3, 2026, UK Chancellor Rachel Reeves delivered a cautious Spring Statement amid rising Middle East tensions and soaring oil prices. She highlighted economic stability and falling inflation forecasts but warned that prolonged conflict could disrupt growth and public finances. The Office for Budget Responsibility's forecasts remain optimistic but face risks from energy costs, migration, and unemployment.
Rachel Reeves delivered the UK spring statement on March 3, 2026, amid escalating Middle East conflict. The forecast predicts slower growth and rising energy prices, but no new fiscal measures. Market reactions highlight uncertainty, with energy costs and geopolitical risks threatening economic stability.
Recent forecasts from the UK’s Office for Budget Responsibility (OBR) and the British Chambers of Commerce (BCC) indicate slower economic growth and rising unemployment for 2026. The outlook is now more uncertain due to escalating Middle East conflicts and policy impacts, with inflation expected to fall but remain volatile.
UK housing prices are forecasted to rise modestly over the next two years amid geopolitical tensions and rising energy costs. Mortgage rates are increasing, and consumer confidence is waning due to the Iran conflict, which also influences build costs and market demand.
Global central banks, including the Bank of England and Federal Reserve, are maintaining current interest rates as oil prices soar due to the Iran conflict. The war has disrupted energy supplies, raising inflation concerns and delaying rate cuts. UK GDP remains stagnant amid geopolitical tensions.
Chancellor Rachel Reeves outlined her strategy for economic growth, emphasizing AI, regional development, and closer EU relations. She announced a £2.5bn investment in advanced computing, including a £1bn quantum procurement program, amid weak economic data and global tensions. The speech signals a shift towards strategic state intervention.
London Mayor Sadiq Khan and other Labour figures advocate rejoining the EU, citing Brexit's economic damage and global instability. Khan suggests Labour should commit to rejoining in the next election manifesto, while the government maintains its red lines against re-entry into the customs union and single market.
The UK has reported a lower-than-expected public sector deficit of £132 billion for the year to March, driven by higher tax receipts. However, ongoing conflicts in the Middle East are expected to increase borrowing costs and reduce fiscal space, threatening future economic stability.