Simon Jack
Business editor

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Will the UK be able to cut a deal with US President Donald Trump on tariffs? There's certainty plenty going on behind the scenes to make it happen.

The BBC understands that Prime Minister Keir Starmer spoke with Trump on Sunday about an "economic prosperity deal". Before that, Business Secretary Jonathan Reynolds has held meetings with US Commerce Secretary Howard Lutnick, among others.

There is, the BBC is told, appetite for a deal on both sides.

But the government will have to move quickly before next Wednesday - dubbed "liberation day" by the typically-bombastic Trump - when the import taxes are due to come into force.

Yesterday, the US president announced a 25% tariff on all cars not built in the US, with the tax expected to come into force next week.

We can bring you a bit more now on comments from Institute for Fiscal Studies director Paul Johnson, who spoke to the BBC a little earlier this morning.

The US trade tariffs on cars announced overnight by Donald Trump overnight are "certainly unhelpful" for the UK, Johnson says.

In its assessment of the government's tax and spending plans on Wednesday, the OBR pointed out that tariffs - especially if nations retaliate against the US with import taxes of their own - could really damage the UK's finances.

It could reduce the £9.9bn headroom the chancellor has against her self-imposed borrowing and debt rules and, possibly necessitate more cuts or tax rises.

Johnson reckons that the US tariffs on foreign cars will not have a "massive effect" on the UK economy but is a good example of the uncertainty that the UK and other countries which Britain trades with are now facing.

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Chancellor Rachel Reeves has said that her economic plan is starting to "bear fruit", with the OBR expecting that individuals will be £500 better off between now and 2029/30.

Opposition politicians, however, are challenging the chancellor's plans.

Conservative leader Kemi Badenoch accused the government of creating economic "chaos" with the Spring Statement yesterday, calling it "all smoke and mirrors".

Liberal Democrat leader Ed Davey called the cuts a "double whammy" that hit disabled people who can't work while cutting support for carers.

He described the policies in the Spring Statement as "cruel" and a "false economy."

During the Spring Statement, Rachel Reeves pointed out that, according to the OBR, individuals will be £500 better off between now and 2029-30.

But Paul Johnson, director of the Institute for Fiscal Studies (IFS), tells the BBC that while that is "better than nothing" it is still a "pretty feeble" rate of growth.

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The chancellor says there will be "no quick solutions" to fixing the UK's "damaged economy".

Writing in the Times,, external she says her plan is starting to "bear fruit", with wages up and interest rates down.

She points to a longer-term forecast from the Office for Budget Responsibility (OBR) - the government's financial watchdog - which predicts growth will be higher than expected thanks, in part, to more housebuilding.

"I won’t shy away from the challenges we face, and change won’t happen overnight. But the prize on offer to us is immense. Shovels in the ground and cranes in the sky, and an economy that finally delivers on the priorities of the British people," Reeves writes.

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Benefits cuts: More than three million families will be £1,720 a year worse off by 2030 due to benefit cuts, analysis from the Department for Work and Pensions finds.

At the same time - some people will gain from the changes. 3.8 million families are set to be on average £420 per year better off from the new policies.

Growth: The OBR (a group of independent economists who assess the government's plans) revised the UK's growth forecast from 2% to 1% this year.

But it has upgraded estimated growth for the next four years, to 1.9% next year, 1.8% in 2027, 1.7% in 2028 and 1.8% in 2029.

Fiscal rules: Reeves said her rules on tax and spending are "non-negotiable". Those rules say that she will not borrow to fund day to day spending.

Headroom: The chancellor said she had restored the government's £9.9bn "headroom" - that is wiggle room to spend more. But the OBR said there were a range of global events (such as Donald Trump's tariffs) which could knock her plans off course.

Defence spending: This will be increased to 2.5% of GDP - the chancellor announced an extra £2.2bn for defence next year.

Read more about the Spring Statement key points here.

Chancellor Rachel Reeves is defending her handling of the economy today after she squeezed the welfare budget further and boosted defence spending in her Spring Statement.

It was meant to be a routine update on the public finances but Reeves made more extensive changes after her plans were blown off course by lower growth and higher government borrowing costs.

The Office for Budget Responsibility (OBR) - the government's financial watchdog - halved its growth forecast for this year to 1%.

Reeves also restored the government's £9.9bn "headroom" - spare cash it will have by the end of its five year budget period to deal with unexpected developments.

But the OBR warned that UK and global economic uncertainty could derail her plans, saying the "headroom" is a "very small margin" and risks are heightened by "significant uncertainty" in the UK and global economy.

After the chancellor's update on the economy, US President Donald Trump announced new import taxes of 25% on cars and car parts coming into America in a move that threatened to widen the global trade war.

Reeves will be speaking to the BBC this morning to defend her plans, and we'll also hear from shadow chancellor Mel Stride, who yesterday accused the chancellor of having "tanked the economy" due to her "ineptitude".

Stay with us as we bring you updates, analysis and insight on what the Spring Statement means for you.

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Just after 12:30 GMT, Rachel Reeves gave her Spring Statement, telling Parliament she was on track to meet her self-imposed fiscal rules.

That means the government won't need to borrow money to fund day-to-day spending by 2029 / 30. (And she also said the day-to-day budget would actually be in surplus before then, in 2027/28).

But the government's watchdog, the Office for Budget Responsibility, warned that the margin was "very small", with much that could derail the UK economy - not least US trade tariffs.

There was much else in Reeves' announcement, too - including benefit cuts and a reduced short-term growth forecast. For a complete round-up, read here, while our economics editor Faisal Islam's analysis is here.

We're closing our live coverage now, and will be back tomorrow. Thanks for reading.

When it comes to the housing target, what is 'touching distance'?published at 18:51 Greenwich Mean Time 26 March

18:51 GMT 26 March

By Anthony Reuben

Earlier, the chancellor told MPs that the OBR – which makes forecasts for the government – predicted that changes to planning rules would "help build over 1.3 million homes in the UK over the next five years, taking us within touching distance of delivering our manifesto promise to build 1.5 million homes in England in this Parliament".

In a press release, the government said that things like the £2bn invested in social and affordable housing this week, which was not reflected in the OBR forecast, would help with reaching its target.

But Rachel Reeves was clear that the forecast was for new homes across the UK - while her target was for England only.

Paul Johnson, from the Institute for Fiscal Studies, told the BBC's Politics Live that once you exclude homes in Scotland, Wales and Northern Ireland, "it’s not quite as close touching distance as it might sound – I think we’re more like 400,000 rather than 200,000 out".

Who will lose when benefits change, and who will gain?published at 18:49 Greenwich Mean Time 26 March

18:49 GMT 26 March

By Robert Cuffe

The Department for Work and Pensions earlier published , externalits impact and equality assessment , externalof the government's welfare reforms, which suggest that the changes to benefits could lead to 250,000 more people in poverty* by 2030, including 50,000 children, increasing the poverty rate by 0.6 percentage points.

The vast majority (96%) of families that lose financially are estimated to have someone with a disability in the household.

And the DWP estimate that one-in-five (20%) households who report having someone with a disability in the household will lose out.

This assessment does not account for any changes in employment that might be caused by the welfare changes or funding for employment support.

Overall, DWP forecasts that 3.2 million families will lose out from the benefits changes, losing around £1,700 a year on average.

Losses will be concentrated among those who are no longer eligible for Pip (roughly 800,000 people, losing £4,500 a year on average) or those not eligible for the health component of universal credit (losing on average £3,000 a year). Some will lose both benefits.

But there will also be 3.8 million families expected to be better off as a result of the changes. But their gains are smaller on average (£420 a year).

The biggest winners are the roughly 370,000 people who might not have qualified for the UC Health Element under the old Work Capability Assessment plans but will under the government's new rules (gaining roughly £2,600 a year).

Many more families will gain from the increase in the standard allowance, but that is worth a lot less - around £265 a year to roughly 3.9 million households.

*Relative poverty (income below 60% of the median that year), after housing costs

Chancellor lays down a challenge to Scottish governmentpublished at 18:46 Greenwich Mean Time 26 March

18:46 GMT 26 March

Douglas Fraser
Scotland business and economy editor

Though hardly her top priority in the Spring Statement, the chancellor has laid down several challenges to the Scottish government at Holyrood.

One is to handle more than £400m in cuts to devolved welfare spend, implied by the size of the block grant from the Treasury to Holyrood at the end of the five-year spending plan.

Will Scottish ministers try to mitigate the cuts in Personal Independence Payments in its devolved Scottish equivalent, the Adult Disability Payment?

If so, what else will be cut, or could the funds come from higher income tax?

Another is to apply a similar level of cuts to other public services, if the current trajectory of block grant funding is followed over those five years.

By 2029-30, the figures show a drop of £700m in day-to-day spending compared with October's figures.

The Fraser of Allander economic institute at Strathclyde University goes further, saying the total reduction in real terms day-to-day funding for Holyrood is close to £900m by the end of the decade – though there’s a lot of uncertainty around such figures.

So will Scottish ministers reduce the size of the civil service, for instance, using its £200m share of a "transformation fund"? Adopting artificial intelligence to make services more efficient? Will it de-regulate where it can, and match the ambition for house-building?

The better news is that Holyrood has gained £28m in block grant for the financial year starting next month. Not a lot within this Spring Statement, but it’s something.

Peter Coulter
BBC News NI

Northern Ireland’s First Minister Michelle O’Neill calls Rachel Reeves' Spring Statement a "macho agenda" at a time when the public sector is "on its knees", and the health service is in need of investment.

"This is a time for our own administration to fight back hard against this militarisation agenda," she adds.

"This does not serve the interests of the people here."

Deputy First Minister Emma Little-Pengelly says the chancellor needs to change course and argues that Reeves is "punishing people who are least capable of being able to take that burden".

• Read more on the impact of Rachel Reeves' budget for Northern Ireland

What does the Spring Statement mean for Scottish Labour?published at 18:34 Greenwich Mean Time 26 March

18:34 GMT 26 March

Glenn Campbell
BBC Scotland Political Editor

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There is much that the UK Labour government is doing that makes life more difficult for their Scottish party, which faces crucial Holyrood elections next year.

The Spring Statement confirms substantial cuts to welfare spending over the next few years, which could either reduce payments to Scottish claimants - or reduce the cash available for the Scottish government to spend on the elements of welfare spending that are devolved.

Many Labour MSPs admit this is a hard sell, even though there is also new investment in helping some people off benefits and into work.

They are getting complaints from anxious constituents, even those whose benefits are secure and will not lose a penny.

It’s particularly tricky because UK ministers have already made cuts to winter fuel payments for pensioners which Scottish ministers are working to offset.

The SNP is also working on plans to end the two-child cap on access to benefits which UK ministers have, so far, said is unaffordable.

It is easier for Scottish Labour leader Anas Sarwar to sell increased spending on defence as an investment that will benefit jobs and the economy in Scotland.

But there is also a constituency in Scottish Labour that is more uneasy. The former party leader Richard Leonard has described more spending on weapons and less of welfare as a cause for "despair".

Adam Fleming
Newscast presenter

We've had a few hours to go through all the graphs, documents and charts that come with something like the chancellor's Spring Statement, which means we'll be ready for a live edition of the BBC's daily news podcast Newscast shortly.

The main things I’ve noticed is that chancellor’s numbers add up because of some tight spending plans towards the end of the Parliament and an assumption that fuel duty will go up - which it never does.

And the Office for Budget Responsibility say this could all be blown up next week if Donald Trump puts import taxes on goods from the UK (which the government say they’re negotiating to avoid).

It gives this a slightly theoretical feel, all while the planned cuts to disability benefits will feel real to those that experience them.

We’re live now on the BBC Sounds Live News Stream and the BBC NewsYouTube channel , externalto break it all down with Chris Mason, Faisal Islam, and Dharshini David.

Kevin Peachey
Cost of living correspondent

Image source, PA Media

The chancellor is keen to emphasise the government’s ambitious housebuilding target (read more on that here).

But first-time buyers will be disappointed to see official forecasts that show property prices continuing to rise.

The average house price is forecast to rise from about £265,000 at the end of last year, to £295,000 in 2029, according to the Office for Budget Responsibility.

Each year, property prices are expected to go up by about 2.5% on average, roughly in line with wage rises.

The OBR says planning reforms will increase the number of homes by 0.5%, and will lead to prices being 0.8% lower in 2029 than they would have otherwise been.

But that doesn’t mean house prices will fall; they will rise, it says.

Faisal Islam
Economics editor

If the US imposes 20% tariffs on the UK next week, it could leave to a downgrade in UK growth and "wipe out" the chancellor’s £9.9bn headroom which remains in place as a result of her Spring Statement measures announced today, the Office for Budget Responsibility chairman tells me.

"If the US levied an additional 20% tariffs on the UK and the rest of the world, that could reduce the level of UK output next year by 1% and also wipe out the headroom that the chancellor has retained against her fiscal rules," Richard Hughes says.

He says there are many areas of uncertainty around the OBR forecast.

"Interest rates are higher which puts greater pressure on both businesses, but also the public finances, and the risks to the outlook are very elevated.

"There’s uncertainty about the UK’s productivity performance, there’s uncertainty around the future path of interest rates which have been very volatile, and also great uncertainty about the trade outlook."

Hughes also responds to criticism that the OBR has become too powerful, with accusations that decisions the economic forecaster makes lead to big changes in government policy.

"The only powers we have are the ones given to us by Parliament legislation, and those are the powers to produce a forecast, to scrutinise the cost of government policies and to assess whether the chancellor is on course to meet her fiscal rules," he says.

"The chancellor chooses the policy she wants to implement, she chooses the rules she sets for herself. If she wants to change those rules, she can change those rules. If she wants to change the policies, she can change those policies.

"She’s in charge of £1.5 trillion of spending and £1.5 trillion of receipts. That gives her £3 trillion worth of choices. She made the choices she made in this Spring Statement. And we assess their implications for the macro economy."

Michael Race
Business reporter

So far it looks like Rachel Reeves "has managed to pull off her rebalancing act without overly spooking the markets", according to Danni Hewson, AJ Bell head of financial analysis.

As we've reported, Reeves says her self-imposed borrowing rules are "not-negotiable". Such rules are designed to maintain credibility with financial markets, which the government relies on to fund its plans.

If markets aren’t convince by a government’s creditworthiness, they’ll charge more to lend money through higher interest rates.

Hewson says the main stock indexes on the London Stock Exchange both "wobbled" while the chancellor was speaking, but have since recovered.

The cost of borrowing over 10 years for the government has edged lower too.

How are the chancellor’s sums adding up?published at 17:37 Greenwich Mean Time 26 March

17:37 GMT 26 March

By Ben Chu

Last Autumn, the chancellor left herself with £9.9bn of “headroom” against her chosen fiscal rules – basically a flexibility buffer on borrowing.

The government’s official forecaster, the Office for Budget Responsibility (OBR), now says that buffer was wiped out by a projected rise in the government’s borrowing costs over the Parliament, relative to last Autumn.

So to plug the gap and stick to her rules, Rachel Reeves has announced cuts in welfare spending and pencilled in further cuts to public service spending.

The OBR also estimates the government’s planning reforms – enabling more building – will help by boosting the overall economy and tax revenues.

When you add these impacts together, the OBR says the chancellor will have £9.9bn headroom – which is exactly where she started.

But remember, this is all based on forecasts and this is still a relatively small amount in an economy that spends £1 trillion a year (and raises around the same in tax) so it could easily be wiped out again in the future, if the economic outlook deteriorates.

• Watch Ben's earlier explainer on what the rules are, below

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Chancellor Rachel Reeves has finished a news conference explaining her Spring Statement on the government's plans for the UK economy.

(In case you missed it, read a breakdown of the main takeaways from her appearance in Parliament earlier.)

Here are the main points from the news conference:

• Reeves made the case for the government's decisions: "The plan for change is working," she said. That's tempered by global instability, she admitted, and the UK's cost-of-living crisis is "still very real"
• The BBC's Faisal Islam asked about speculation the Digital Services Tax could be abolished, and if Reeves could justify a "tax giveaway" to tech multinationals. She said the government's view is unchanged, that companies should pay tax in the countries they operate
• The chancellor was asked if her plans are punishing the most vulnerable. She replied that there is "nothing progressive and nothing Labour" about losing control of public finances. "This government wants to reduce debt, and reduce the deficit," she said
• Reeves repeated that her (self-imposed) fiscal rules were non-negotiable, and said she inherited the lowest headroom of any chancellor, though she'd managed to increase it
• Any tariffs levied against UK goods by the White House would hurt both economies, Reeves said

Fiscal rules are non-negotiable, Chancellor Rachel Reeves says, as she addresses reporters at the news conference in Downing Street.

"People should have no doubt about my commitment and how seriously I take the fiscal rules, as I said today they are non-negotiable," the chancellor says.

As a reminder, some people - including some MPs in her own party - say Reeves should loosen her self-imposed rules, in order to give herself room to avoid spending cuts.

Before ending the news conference, Reeves is asked about taxes. The chancellor says she had to ask businesses to pay more in tax back in October, during the Budget, which was necessary to repair public services.

The chancellor goes on to say the previous government did not respect taxpayers' money. She says for "too long" people's money that's paid into taxes has not been respected.