2025 UK Budget – Economic Strategy, Investment Plans, and Key Reforms for Business Growth

Overview of the 2025 UK Budget focusing on Stability, Growth, and Investment

This year’s UK Budget sets out a strategy focused on stabilising the economy through consistent fiscal rules and careful financial management. Growth is now forecast at 1.5% this year, surpassing previous expectations, while borrowing is set to fall as a proportion of GDP throughout the forecast period. Public debt is expected to decrease to 82.2% of GDP by 2030/31. The Chancellor confirmed the government’s commitment to meeting its fiscal rules and outlined plans to assess the fiscal position annually, reinforcing both stability and credibility. Ministers have also ruled out a return to austerity, instead prioritising long-term investment and maintaining a sustainable fiscal path.

Long-Term Investment with £120 Billion for Infrastructure and Economic Growth

Long-term investment is positioned as the cornerstone of future growth, with £120 billion secured for key areas such as transport, energy, digital infrastructure, and housing. Major national projects, including the Lower Thames Crossing, rail upgrades across the North and Midlands, and the expansion of nuclear power, will continue to be fully funded. Reforms to enterprise and investment schemes aim to support founders and scaling businesses in attracting talent and capital. Updated ISA rules are designed to encourage greater household investment in productive sectors. Across the UK, regional funding will support AI clusters, regeneration programmes, advanced manufacturing, and skills development, ensuring that the benefits of growth are shared widely across communities.

Commitment to Rebuilding Public Services including NHS, Schools, and Welfare Reforms

The Budget further demonstrates the government’s commitment to rebuilding public services. The NHS will receive significant investment, including £300 million for digital upgrades and funding to create 250 neighbourhood health centres by 2030. Schools will receive funds for essential improvements to buildings, libraries, and playgrounds. A major social policy shift sees the abolition of the two-child limit, including the removal of the associated exemption clause, measures expected to lift around 450,000 children out of poverty. Broader welfare reforms focus on reducing fraud, restoring face-to-face assessments, and supporting young people into education, training, or employment. This includes free apprenticeship training for under-25s in SMEs and the introduction of a new Youth Guarantee.

Tax Strategy focusing on Fairness, Contributions, and Key Changes for Businesses and Households

The Chancellor’s tax strategy is framed around fairness and contribution. Income tax and National Insurance thresholds will remain frozen until 2031, alongside a freeze on the student loan repayment threshold. New measures will target wealth and unearned income, including higher rates on property, savings, and dividends, as well as a high-value property surcharge and a cap on pension salary sacrifice for higher earners. High street businesses will benefit from permanently lower business rates, while measures will be introduced to prevent online retailers from undercutting physical shops. For households, the temporary fuel duty reduction is extended until 2026, and a new per-mile duty for electric vehicles will fund long-term road maintenance. Gambling duties are updated with higher tax rates for online operators, alongside the abolition of bingo duty.

Adapting to the New Landscape and How Businesses Can Leverage Budget Reforms

As the government moves forward with these reforms, businesses and organisations will need to adapt to the new landscape. At Hanson Search, we specialise in helping organisations navigate evolving policy landscapes and build teams that drive growth, innovation, and transformation. Whether you’re looking to attract top talent, enhance leadership capabilities, or respond to emerging market trends, we offer expert recruitment and talent advisory services to support your strategic objectives.

Whether you’re hiring top Public Affairs talent or considering your next career move, our team would be delighted to support you.

Peter Ferguson is Managing Consultant in the Public Affairs Practice. Peter advises and supports some of the world’s most renowned communications consultancies, boutique public affairs agencies and global in-house clients.

Hanson Search is a globally recognised, award-winning talent advisory and headhunting consultancy. Our expertise lies in building successful ventures worldwide through our recruitment, interim and executive search in communications, sustainability, public affairs and policy, digital marketing and sales.