New figures out today show the cost of living continued to soar last month. It was announced on Wednesday that the rate of inflation rose by 6.2% in the 12 months to February - the fastest for 30 years - as fuel, energy and food costs surged.
The figures came as the Chancellor of the Exchequer is due to make a major announcement today which will affect the finances of every citizen and household in the UK. Rishi Sunak's spring statement will reportedly be set to slash fuel duty as Boris Johnson begins to pursue long-term measures to guard against future energy bill pressures.
It has also been suggested that the Chancellor may cut fuel duty by as much as 5p per litre to help support families and businesses through the current cost of living crisis. It comes as forecourt prices soar in the wake of Russia's invasion of Ukraine with the average price of petrol now standing at a record 165.9p per litre and 177.3 per litre for diesel.
READ MORE: What to expect to see in the statement
Mr Sunak said: "My priority over the rest of this Parliament is to cut people's taxes. That is my mission." He has also hinted that the budget will be more focused on a realignment of spending, instead of any new major allocations.
The statement will also reportedly see the Chancellor potentially raise the threshold at which people start paying national insurance. It could potentially see 150,000 people opt-out of paying next month's planned 1.25 percentage increase on NI.
What time is the spring budget announcement?
Mr Sunak is expected to deliver the spring statement at around 12.30pm today in the House of Commons. Often known as the 'mini-budget', the Chancellor will update the Commons on the overall health of the economy and examine the progress made with the autumn Budget.
This means no major tax or spending changes will be announced today since these are only made once a year at the autumn Budget, which last took place on October 27, 2021.
What major announcements will be made?
An increase in the NI in April will be set up to help pay for clearing the NHS backlog following the pandemic. But Mr Sunak could delay the introduction of the increase. Mr Sunak could also increase Universal Credit and other benefits.
Despite inflation heading for 8 per cent, the current benefit increase is only set at 3.1 per cent for April. Changes affecting this could include more increase or the removal of the £20 a week uplift. Mr Sunak could reportedly introduce more of the government's plan to get more people into the workforce.
Further changes to gas and electricity bills could see increases to the £150 Council Tax rebate being handed to Band A to D homes next month, or he could delay the repayment of the £200 discount planned for October. He is also considering providing more financial help for parents who pay for childcare.
"The current level of waste across government is simply not acceptable - which is why we're doubling down on wasteful spending and launching an efficiency drive to make £5.5 billion worth of savings," Mr Sunak said.
Around £800 million was expected to come from a review of "Quangos" or arm's lengths bodies which are publicly funded organisations that are not entirely controlled by the government. The Income Tax personal allowance and 40p rate threshold will freeze at £12,570 and £50,270 which the IFS think tanks warn will lead to more than £20bn in 'stealth' taxes.
