Rishi Sunak is preparing to deliver his Spring Statement on the health of the economy to parliament, a tricky proposition as the pandemic recovery threatens to be undermined by a growing cost of living crisis and the knock-on effect of Russia’s war in Ukraine.
The chancellor is expected to address the House of Commons from 12.30pm, immediately after Prime Minister’s Questions, offering an update on the progress made since his Autumn Budget speech last October.
The Independent will be live blogging the speech and bringing you the breakout stories, while it will be broadcast live on BBC Parliament and across the major news channels.
Mr Sunak is under increasing pressure to do more to help households through the present crisis, as new figures released by the Office for National Statistics (ONS) on Wednesday revealed that the rate of inflation has soared to a 30-year high.
It said the Consumer Price Index measure of inflation rose to 6.2 per cent last month, up from 5.5 per cent in January, which represented its highest level since March 1992, when it stood at 7.1 per cent.
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Rising energy, goods and food prices were the driving forces behind a 12 per cent increase in inflation over the 12 months to February, according to the ONS.
The chancellor has pledged to “stand by” families to help them weather present conditions and it is widely expected that he will cut fuel duty and may also be considering raising the threshold before workers are required to begin paying out National Insurance (NI).
Labour, which has branded Mr Sunak the “high-tax chancellor”, has joined some Conservative MPs in urging him to scrap the 1.25 percentage point hike to NI, which will hit in April, just as domestic utility bills soar when the energy price cap is raised, paving the way for ￡2,000-per-year household electricity and gas expenses.
The Financial Times reported on Tuesday evening that forecasts in the statement will show the national deficit is better than expected this year, to the tune of ￡20bn.
However, the newspaper said Mr Sunak is planning to set aside a large part of this windfall cash – rather than investing the full sum in driving down the cost of living.
It is also anticipated he will tell MPs in the Commons that having a strong economy is vital in tackling Moscow’s aggression.
Joining the likes of the Federation of Small Businesses in calling for the chancellor to do more to tackle issues at home was Dame Claire Moriarty, chief executive of the charity Citizens Advice.
“In his Spring Statement, the chancellor has a crucial opportunity to stem the tide of this cost of living crisis,” she said.
“Increasing benefits in line with inflation, expanding the Warm Home Discount and announcing a more generous energy rebate should be top of his list.”
Mr Sunak has already announced a ￡200 loan to gas and electricity payments from October –although not until the price cap jumps 54 per cent.
In addition, certain households will get a ￡150 council tax rebate in April.
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The Treasury has said the measures announced so far add up to around ￡21bn of support this year, taking in the rebate, changes to Universal Credit and the freezing of fuel and alcohol duties.
Additional reporting by agencies