How Rishi Sunak's Spring Statement will affect you.
Key points at a glance.
Adapted from BBC Article 23 March 2022
Chancellor Rishi Sunak has unveiled the contents of his Spring Statement in the House of Commons Key points at a glance He has come under increasing pressure to act, with prices rising 6.2% in the 12 months to February - the fastest for 30 years. The chancellor said the forecast for UK's economic growth was now 3.8% for this year and 1.8% in 2023.
Here is a summary of the main points so far.
State of the economy and public finances
- The UK economy is forecast to grow by 3.8% this year, according to the Office for Budget Responsibility, a sharp cut from its previous prediction of 6.0%
- The economy is then forecast to grow by 1.8% in 2023 and 2.1% in 2024
- The annual inflation rate was 6.2% in February, and is likely to average 7.4% for the rest of this year, but with peak of 8.7% in the final quarter of 2022
- The unemployment rate, which is currently at 3.9%, is now predicted to be lower in every year of the OBR's forecast.
- The number of people employed between now and 2027 is expected to be 400,000 lower than before the pandemic. This is because of early retirements, long-term sickness and fewer workers arriving in the UK
- Borrowing as a percentage of GDP is expected to fall from 83.5% of GDP in 2022/23 to 79.8% in 2026/27
- The government is forecast to spend £83bn on debt interest in the next financial year, the highest on record
Fuel, energy and living costs
- Fuel duty will be cut by 5p per litre until March 2023
- Homeowners installing energy efficiency materials such as solar panels, heat pumps, or insulation installed will not pay VAT
- Local authorities will get another £500m for the Household Support Fund from April, creating a £1bn fund to help vulnerable households with rising living costs
Taxation
- The income threshold for at which point people start paying National Insurance will rise to £12,570 in July, which Mr Sunak said was tax cut for employees worth over £330 a year
- Mr Sunak pledged to cut basic rate of income tax from 20p to 19p in the pound before the end of this Parliament
- The Employment Allowance, which gives relief to smaller businesses' National Insurance payments, will increase from £4,000 to £5,000 from April
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