The UK Government has published its Spring Forecast 2026, setting out the latest economic outlook and confirming the fiscal direction for the year ahead.
While the Forecast did not introduce major new policy measures, it provides an important economic backdrop for UK manufacturing and the aluminium supply chain.
The Economic Context
The Office for Budget Responsibility (OBR) has revised growth expectations, with UK GDP forecast to grow at a more modest rate in 2026 before gradually strengthening thereafter. Inflation is expected to continue easing towards target levels, while public borrowing is projected to fall over the medium term.
However, global uncertainty remains a clear theme. Geopolitical tensions, particularly in the Middle East, alongside ongoing volatility in global energy markets, are identified as material downside risks to the UK economy.
For energy-intensive sectors such as aluminium processing, this wider uncertainty is highly relevant.
Labour Market & Skills
The Forecast indicates a softening labour market, with unemployment expected to rise moderately. While this may ease some recruitment pressures, it also reinforces the importance of long-term skills planning, workforce development and industrial confidence.
For ALFED members, maintaining access to technical and specialist skills remains a strategic priority, particularly in processing, finishing and recycling operations.
Investment & Fiscal Direction
Notably, the Spring Forecast did not introduce significant new tax or industrial policy measures. The Government has reiterated its focus on fiscal stability, with major policy announcements expected in the Autumn Budget.
This suggests a period of policy continuity rather than expansion. For manufacturers, this reinforces the need for:
- Clear and stable energy competitiveness frameworks
- Predictable trade and carbon compliance policy
- Investment signals aligned with industrial strategy
Why This Matters for Aluminium
The Spring Forecast shapes the economic environment in which members are making decisions around:
- Capital investment
- Energy contracts
- Export strategy
- Workforce planning
ALFED will continue to monitor the implications of the economic outlook and ensure that aluminium’s position, on energy costs, trade exposure and CBAM implementation, remains clearly represented in Government engagement.
If you have concerns or insight relating to how current economic conditions are affecting your business, please contact the ALFED team. Member intelligence directly strengthens our national advocacy.
