Spring Budget 2026: What it means for businesses

 

The Spring Budget 2026 (officially the Spring Statement) was a relatively low-key update from Chancellor Rachel Reeves. Unlike major Budgets in previous years, this statement focused more on updated economic forecasts rather than introducing new tax changes or large spending commitments.

For business owners, that might actually be good news.

After several years of economic turbulence, the government’s message was clear: stability and predictability are the priority for now.

While there were no major tax announcements for businesses, the updated economic forecasts still provide important insight into what the coming years could look like for SMEs.

You can read the official Spring Statement details here:
https://www.gov.uk/government/topical-events/spring-statement-2026

 

Economic Outlook: Slower Growth but Improving Stability

One of the most significant updates in the Spring Budget came from the Office for Budget Responsibility (OBR), which publishes independent forecasts for the UK economy.

According to the OBR (Office for Budget Responsibility):

• Economic growth for 2026 has been downgraded to 1.1%, down from 1.4% forecast in the Autumn Budget.
• Growth is expected to recover slightly, reaching 1.6% in both 2027 and 2028.
• Inflation is predicted to average 2.3% in 2026, moving toward the government’s 2% target by 2027.
• Unemployment is forecast to peak at around 5.3% this year, before gradually falling later in the decade.

 

For businesses, slower growth often means a more cautious market environment. However, the predicted fall in inflation should gradually ease pressure on costs such as:

• supplier prices
• wages
• borrowing costs
• operational expenses

OBR (Office for Budget Responsibility) forecast details can be found here:
https://obr.uk

 

What the Spring Budget Means for SMEs

Although there were no major tax changes, the broader economic outlook still affects businesses in several important ways.

1. Greater Economic Stability

One of the key themes of the Spring Budget was stability.

After several years of sharp tax changes, interest rate volatility and economic uncertainty, the government is currently prioritising calmer financial markets.

For businesses, this stability can help with:

• longer-term financial planning
• forecasting sales and costs
• making hiring decisions
• securing lending or investment

Predictability in the tax system is often just as valuable as tax cuts.

 

2. Inflation Expected to Continue Falling

Inflation has been one of the biggest challenges for businesses over the past few years.

 

The Spring Statement confirmed that inflation is expected to average 2.3% in 2026, before falling to the Bank of England’s 2% target by 2027.

Lower inflation should gradually ease pressure on business costs such as:

• raw materials
• supplier pricing
• transport and logistics
• energy bills
• wage demands

You can view the latest inflation data here:
https://www.bankofengland.co.uk/monetary-policy/inflation

 

 

3. Corporation Tax Remains Unchanged

For limited companies, Corporation Tax rules remain the same following the Spring Budget.

Current rates are:

• 19% for profits up to £50,000
• 25% for profits above £250,000
• Marginal relief applies between these thresholds

Full HMRC guidance can be found here:
https://www.gov.uk/corporation-tax-rates

While no changes were announced, the government did signal that major fiscal decisions are more likely to appear in the Autumn Budget.

That means businesses should continue to plan based on the existing tax framework for now.

 

4. Business Rates Adjustments Continue

While there were no new large-scale business tax changes announced, the government confirmed that previous adjustments to business rates relief remain in place.

Earlier support measures included:

• extended business rates relief for hospitality businesses
• specific relief for pubs and music venues in England

These changes will continue to impact the Treasury’s budget forecasts.

Business rates guidance can be found here:
https://www.gov.uk/introduction-to-business-rates

 

Interest Rates, Borrowing and Business Investment

Another important takeaway from the Spring Budget is the outlook for interest rates.

Although the Spring Statement didn’t introduce new policy changes, the improved inflation forecast suggests that interest rates may gradually stabilise over the coming years.

For businesses, this could influence:

• loan affordability
• business investment decisions
• commercial mortgage rates
• expansion plans

However, the Chancellor also warned that global uncertainty remains high, particularly due to ongoing geopolitical tensions and global energy markets.

This means businesses should continue planning carefully around borrowing and investment.

 

Housing and Construction Outlook

The Spring Budget also highlighted forecasts for the housing sector.

The OBR expects:

• housebuilding to fall to around 220,000 homes in 2026/27
• then rise to over 300,000 homes annually by 2030

Mortgage interest rates are expected to rise slightly from around 4.1% today to around 4.5% by 2030, although this is still lower than previous forecasts.

For businesses connected to construction, property or housing supply chains, this outlook could influence demand levels over the coming years.

Housing forecast details can be found here:
https://www.gov.uk/government/organisations/office-for-budget-responsibility

 

What Business Owners Should Focus On Now

Because the Spring Budget didn’t introduce major tax changes, the key takeaway for businesses is strategic financial planning.

Now is a good time to focus on:

• reviewing profitability
• improving cash flow management
• planning tax-efficient director remuneration
• reviewing business structures
• preparing for potential Autumn Budget changes

At Infinity Accounting, we help businesses stay proactive with tax planning, compliance and financial strategy, so you can focus on running your business with confidence.

Explore our services here:
https://infinity-accounting.co.uk/services/

 

Other Announcements From the Spring Budget

While the Spring Budget focused largely on economic forecasts, a few wider updates were also highlighted. These included:

• inflation predicted to average 2.3% in 2026
• unemployment expected to peak at 5.3%
• no new tax changes announced
• energy prices potentially easing slightly due to changes in the energy price cap
• the government prioritising economic stability ahead of the Autumn Budget

These factors contribute to a broader economic environment that businesses should keep in mind when planning ahead.

 

A “Quiet” Budget Can Still Matter

The Spring Budget 2026 may not have contained headline-grabbing tax changes, but it still offers valuable insight into the direction of the UK economy.

For business owners, the key messages are:

• stability remains the government’s priority
• inflation is expected to fall
• growth will remain modest in the short term
• major policy decisions are likely to come later in the year

In uncertain economic conditions, good financial planning becomes even more important.

If you’d like support reviewing your tax position or preparing for future changes, Infinity Accounting is here to help.

Get in touch with our team:
https://infinity-accounting.co.uk/contact/