UK Budget 2025: PwC comments on implications for Northern Ireland

Greg Boyd, Northern Ireland Economist at PwC UK:

“This Budget leans heavily on revenue-raising measures at a time when public finances face increasing pressure. For Northern Ireland, where public services are already under significant strain, placing more of the fiscal adjustment on higher taxes rather than spending cuts will help protect Stormont's budgets. 

“The Budget confirms that the Northern Ireland Executive will receive an additional £370 million in funding - £240 million in resource funding and £130 million in capital funding through the Barnett formula, on top of record settlements from the 2025 Spending Review. This provides a much-needed boost to Stormont’s finances at a time of acute fiscal pressure.”

Caitriona McCusker, Market Senior Partner for Northern Ireland at PwC UK:

“For Northern Ireland, where productivity already lags behind most UK regions, the downgrade to the UK’s productivity projections underlines the scale of the economic challenge. Productivity is crucial to raising living standards, and improvement will require a sustained focus on innovation, skills, and infrastructure. 

To help address this, some targeted interventions for investment and manufacturing were a welcome boost. The £16.6 million over three years for an Internal Market Package will support trade between Northern Ireland and Great Britain. The choice of advanced manufacturing as the sector focus for the Enhanced Investment Zone in Northern Ireland is an opportunity for a sector of real strength in Northern Ireland - aiming to leverage more than £230 million in private investment and support the creation of more than 1,000 jobs over the next decade.

“While these targeted investments are positive, the overall economic outlook remains challenging. The effect of higher taxes on disposable incomes and business costs will be an important factor to watch in the months ahead.”

Aine O’Hare, Northern Ireland Tax Partner at PwC UK:

“The Budget increases the tax burden on households and businesses at a time when they face continuing cost pressures. The most significant revenue-raising measure is the extension of the freeze on income tax thresholds until April 2031. This policy, which applies across the UK including Northern Ireland, will reduce household incomes through fiscal drag, as more people are brought into paying tax or into higher bands when thresholds fail to keep pace with inflation. Other measures, such as higher taxes on property, dividend, and savings income, will also apply in Northern Ireland, further increasing the tax burden.”

Our full Budget reaction