The Chancellor, Rishi Sunak will deliver his Spring Statement tomorrow. What should we expect? Wayne Thomas, partner at Bates Weston looks at the circulating predictions.
Against a backdrop of rising living costs, the Chancellor is widely expected to announce policies to support households and businesses alongside the usual Office for Budget Responsibility economic and fiscal forecasts, expected during a Spring Statement.
The UK economy survived Omicron largely unscathed, but concerns re energy prices, wider inflation and the impact on cost of living have been exacerbated by conflict in Ukraine. Economic growth is now expected to be lower and inflation higher than the 4.5% predicted in the Autumn Budget, perhaps reaching 8%.
Mr Sunak had already responded to the initial pressure on energy prices with a £9 billion support package in February, but pressures have only increased since then. Households can expect pressure on food prices, a further rise in the energy price cap in and higher inflation throughout the year.
Businesses too are facing rising labour costs, rising energy costs, tax increases in April and an end to many of the Covid support measures.
Many are expecting Mr Sunak to focus on the support he can provide to households.
The widely trailed measures include:
- Broad measures that support the incomes of most households, similar to the £150 fuel rebate, for example a delay to the planned 1.25% National Insurance (NI) increase in April or an increase in the threshold at which NI is payable
- Measures that are targeted at low-income households, for example uprating Universal Credit in line with current estimates of inflation
- Measures targeting rising price categories directly, for example cutting the VAT or energy levies on household energy bills or fuel duty cuts
Meanwhile businesses hope that there will be changes to the planned rises in NI, a reintroduction of the NI allowances for microbusinesses, additional support with business rates and cuts to fuel duty.
We do not have long to wait. Mr Sunak will deliver his Spring Statement tomorrow, 23 March 2022, at 12.30pm.
