Chancellor Rishi Sunak is expected to tackle increasing pressure on household budgets when he makes his Spring Statement today.
His plans for a small update of the public finances was blown out of the water by the cost of living crisis and increased pressures arising from the war in Ukraine.
However, the Chancellor is unlikely to row back on his plan to increase National Insurance by 1%.
Rapidly rising inflation is expected to be centre stage. The Office for Budget Responsibility is likely to revise its predictions of inflation from 5% to closer to 10% as fuel and food costs soar. But unemployment and wage inflation are like to better than expected.
The Office for National Statistics revealed the cost of servicing the UK’s £2trn debt rose last month to £2.8bn, due to the rising interest rate. However, the buoyant economy pushed the chancellor’s tax take up by £4.2bn over the February 2021 figures.
With that public finance boost, Mr Sunak is expected to announce further measures for hard-pushed families, on top of the £150 council tax rebate announced to deal with the soaring energy costs.
The Treasury is also expected to cut fuel duty by around 5p a litre in a bid to ease the pain, and there may be further measures for those on universal credits.