• 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, 2.1% in 2024, 1.8% in 2025 and 1.7% in 2026
• 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 is now predicted to be lower over the next few years than in the OBR’s previous forecast in October
• Debt 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 will see VAT cut on these items from 5% to zero for five years
• 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
• However, the OBR on Wednesday forecast that energy bills will rise by 40% again in October, if wholesale gas prices remain at the same level they are now

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 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

Please contact our office if you would like to discuss the Spring Statement and what it means for you and your business