The Chancellor is set to slash spending in her Spring Statement this afternoon
Rachel Reeves is set to say a changed world means cuts are necessary (Image: Getty)
Rachel Reeves will reportedly blame Donald Trump for spending cuts as she unveils her Spring Statement later today. The Chancellor is set to suggest that the world has changed since her October Budget after the US President imposed trade tariffs, which means she has to lower spending. Ms Reeves will seek to deploy measures so that she keep within her “iron-clad” fiscal rules amid depressing forecasts for UK growth. The Office for Budget Responsibility (OBR) will slash the growth rate for this year in half and warn of rising inflation in the months ahead, the Telegraph reports
This is despite better figures released today showing suggested inflation dropped to 2.8% in February. It has also been mooted that Britain could decrease the digital services tax (DST), a levy on big tech companies, in an effort to stave off American tariffs. Reeves is also set to announce welfare spending cuts unpopular with some Labour MPs this afternoon as she deals with a “tough balancing act”. Matthew Holman, an AI lawyer at Cripps, and an expert in the tech and data space, told the PA news agency that the UK’s domestic economy is “weak” and the national taxation and spending agenda “appears all-consuming”.
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Ms Reeves is announcing her latest plans for the economy today (Image: Getty)
He added: “Why is the UK government apparently letting those US corporations off of tax due here and at the same time taking money from hardworking families?
“I should stress that is not my opinion, but it is the likely flak coming in the direction of the Chancellor from the opposition benches and further afield.”
The expert added that the economy faces further hazards.
Mr Holman said: “However, should the Chancellor fail to appease the US administration, the already weak UK economy could face further shocks as a result of a fresh wave of tariffs from Washington which, as I understand it, are due to be announced on April 2.
“Which is the worse fate? That is the balancing act.”
It comes as UK business leaders are calling for AI-focused tax breaks and support for workforce upskilling ahead of the Chancellor’s speech.
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The UK reportedly looking at slashing a tax paid by American tech firms (Image: Getty)
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Martin Tombs, Vice President of Market Readiness at Qlik, a data integration, analytics, and artificial intelligence provider, said: “The UK is talking a big game on AI. Businesses have bought in and it’s clear that the private sector is willing to lead on skills development, it just needs some support.
“AI investment is booming globally, and while over half of UK business leaders back current government policies to support growth, AI support is still lagging. Right now, London is leading the charge but other regions risk being left behind.
“If the UK wants to compete on the world stage, it needs to democratise AI access, ramp up reskilling, and give businesses real backing—through tax breaks and training incentives.
“The Spring Statement is an ideal time for the government to kickstart the next stage of AI-powered growth.”
