In her first Spring Statement, Chancellor Rachel Reeves kept things relatively quiet on the tax front. True to her word, no new tax increases were announced, sticking to her policy of limiting major fiscal changes to one event per year, the Autumn Budget.

For business owners, especially in the agency world, this brings a small sigh of relief. But with growth forecasts downgraded and economic pressures still very present, there’s plenty to keep an eye on.

Growth Forecasts: Halved for 2025

The Office for Budget Responsibility (OBR) now predicts that the UK economy will grow by just 1% in 2025, down from its previous estimate of 2%.

While that’s not great news, it’s not unique to the UK—every G7 economy has seen similar downgrades, according to the OECD. Inflation is expected to average 3.2% this year, but the Bank of England’s 2% target is still in sight—though not expected until 2027.

What About Tax?

Despite last autumn’s £40 billion in tax increases, personal taxes like Income Tax, National Insurance, and VAT remain unchanged for now. That said, many businesses will still be feeling the pinch from the earlier announcements, including higher employer NICs and rising wage costs due to changes in the National Living Wage.

If you’re reviewing your budgets for the year ahead, now’s a good time to make sure you’ve factored in those shifts—especially if you’re planning recruitment or salary reviews.

Increased Defence Spending

The government plans to increase defence spending to 2.5% of GDP, redirecting funding from the overseas aid budget. An extra £2.2 billion will go to the Ministry of Defence in the next financial year.

Why does this matter to agencies? While not directly relevant to day-to-day operations, the investment in innovative defence tech could create opportunities for businesses working in digital, design, or strategic comms, particularly in cities like Derby, Glasgow and Newport, where production is set to ramp up.

Planning Reform and the Housing Market

There was also news on housing: planning reforms aim to get the UK closer to its goal of building 1.5 million homes over this Parliament. If successful, this could have a knock-on effect on economic activity and potentially benefit sectors like architecture, property marketing, and construction-related services.

Reaction from Business Groups: Cautious Optimism

While businesses welcomed the Chancellor’s decision not to increase taxes again, concerns remain. According to the British Chambers of Commerce, the combination of lower growth and higher costs is creating a “challenging spring landscape” for many.

Meanwhile, the Confederation of British Industry (CBI) urged the public sector to follow the example of private businesses by focusing on agility, modernisation, and innovation—all values we know agencies are already embracing.

What Does This Mean for Agencies?

At de Jong Phillips, we’re advising our clients to stay focused on:

• Cashflow planning – especially with higher employment costs looming.

   

• Scenario forecasting – particularly if you’re considering growth or investment in the next 12–18 months.

   

• Efficiency and automation – to manage rising overheads without compromising service.

   

We’re here to help you navigate the economic headwinds with confidence and clarity. If you’d like to chat about how this Spring Statement might impact your agency or want help planning, get in touch.