What new measures could Rishi Sunak introduce in spring statement?
Rishi Sunak is expected to use his spring statement on Wednesday to announce measures to support UK households with growing challenges from the cost of living emergency and the war in Ukraine.
Here are the key points to look out for from the chancellor’s update.
Sunak will present new forecasts from the Office for Budget Responsibility (OBR), with expectations for a weaker economic outlook as high inflation erodes consumers’ spending power.
The consultancy Capital Economics expects a downgrade for GDP growth in 2022 from the 6% forecast in October to about 3.5%.
Most attention will focus on the cost of living squeeze and workers’ pay. The Bank of England forecasts inflation will reach 8% this April, with a possible peak close to 10% later in the year.
Recent stronger tax receipts mean the OBR is expected to forecast a substantial improvement for the public finances this year, possibly worth about £30bn compared with estimates made in October for borrowing of £183bn in 2021-22.
Though the improvements could hand Sunak room to support families with living costs, he has also committed to reducing the deficit and national debt as a percentage of GDP. The chancellor is also likely to warn that high inflation adds to debt servicing costs.
Sunak and Boris Johnson have previously insisted a planned 1.25 percentage point increase in national insurance contributions for workers and their employers will not be jettisoned. However, some reforms to national insurance could be likely under heavy pressure from Conservative backbenchers.
Sunak could choose to defer the increase planned for this April. Another option would be to raise the threshold at which workers start paying national insurance to help those on the lowest incomes.
Anticipation
Read more on theguardian.com
