24th March 2022
Bite-sized business news from the UK and beyond
Good morning Yesterday marked the two year anniversary of the first UK lockdown with events across the country to remember the 164k people who have died with Covid. One of the many things the last two years has shown us is just how quickly life can change and how important it is to cope and thrive when life throws you an unexpected curveball.
Spring statement in a nutshell
UK economic outlook gets bleaker
ECONOMYSpring statement in a nutshell
What’s going on?
Yesterday the chancellor Rishi Sunak set out his plans for taxation and government spending in the Spring Statement with an additional £18bn to support living standards promised for the next 12 months.
Why is this important?
The Spring Statement is traditionally a light touch speech about the economic outlook with few new tax or spending policies compared to the full budget in October.But against a backdrop of surging inflation – now at 6.2%, rising energy prices and a war in Ukraine, the pressure was on for the chancellor to deliver policies to help households through the cost of living squeeze. Key announcements from yesterday include:
A cut to fuel duty of 5p a litre until March next year.
The reduction of VAT on energy saving devices, such as solar panels, to zero.
Another £500m for the household support fund, which allows councils to help poorer families.
A £3,000 increase to the national insurance threshold, taking it to £12,570 from July 2022 – a £6bn tax cut to compensate 70% of workers for the 1.25% NI increase coming next month.
A promise to cut tax rates on business investment in the October budget.
And a cut to the basic rate of income tax from 20% to 19% by 2024, a £5bn tax cut.
The measures announced yesterday mainly focused on taxation but the gaping hole is what happens to universal credit and public sector pay when inflation is rising so quickly. Without a matching increase in these areas, living standards for millions will come under even more pressure.
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ECONOMYUK economic outlook gets bleaker
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