With over £20bn spent on Phase One – the line going from London to the West Midlands – already, the government said it was shifting towards prioritising this opening stage, with the first high-speed rail services set to run between new stations at Old Oak Common in West London and Curzon Street in Birmingham by the early 2030s.
It added that while it remains "fully committed" to delivering HS2 from Euston to Manchester, inflationary pressures coupled with the UK's struggling finances have forced the DfT to delay the Birmingham and Crewe leg by two years.
It blamed "challenging economic headwinds" following Russia's illegal invasion of Ukraine and ongoing supply chain disruption as the global economy recovers from the pandemic, which has made it difficult to deliver the project on time.
The aim is to deliver high-speed services to Crewe and the North West "as soon as possible after accounting for the rephasing of construction", DfT said.
A 2020 inquiry into the feasibility of proceeding with HS2 established that cost of the infrastructure project could reach more than £100bn – far exceeding the original estimate of just £30.9bn.
Transport Secretary Mark Harper said: "We can't ignore the current realities. Putin's war in Ukraine has hiked up inflation, sending supply chain costs rocketing.
"The responsible decisions I've outlined today will ensure we balance the budget at the same time as investing record sums in our transport network to help halve inflation, grow the economy and reduce debt."
The Railway Industry Association (RIA) said the delay was "disappointing" and that the government was prioritising "short-termism" over a long-term strategy for Europe's biggest infrastructure project.
Darren Caplan, RIA chief executive, said: "The delay postpones the immense benefits the project is set to deliver for the country, including extra capacity, more economic growth, improved connectivity – driving levelling up – and hundreds of thousands of jobs specifically in the Midlands and the North, and also to other parts of the UK more widely.
"This stop-start approach to a project is an inefficient use of taxpayers' money, and could ultimately drive the project's costs up, which is the opposite of what the government is trying to do. We strongly urge the government to push on with delivering the full HS2 scheme, including the Eastern Leg and the Golborne Link, or its replacement, as soon as possible."
