This is well known, and Tory MPs expect the chancellor to make the most of it. It is now expected to hit a somewhat lower peak of 97.3%, falling to 94.6% by 2027-28.Īs in the autumn statement, he says day-to-day spending will rise by 1% a year in real terms from next year to the end of the forecast period.Īubrey Allegretti : The wind is in Hunt’s sails here, because of a higher-than -expected tax take providing some extra fiscal headroom. Public sector net debt was previously expected to peak at 97.6% of GDP in 2025-26, falling to 97.3% two years later. He says the OBR is expecting that he will meet his fiscal rule of keeping public sector net borrowing below 3% of GDP, with £39.2bn to spare, by the end of the forecast. Hunt boasts that by the end of the forecast period, the government’s current budget deficit – day-to-day spending minus tax revenues – will be in surplus.
Hunt will have to prove his plan is partly responsible for the positive news. There are some who think the inflation cut would have happened anyway and that Hunt and Sunak are giving themselves a pat on the back for something more dictated by global headwinds. Hunt says growth is one of the PM’s five priorities, but defends his commitment to returning inflation to the 2% target and says it now looks poised to diminish to 2.9% by the end of the year. It is a key target of Labour’s, and restless Tory backbenchers need to be convinced they are not just propping up a government engaged in managed decline. That compares with November forecasts of 1.3% for 2024, 2.6% for 2025 and 2.7% for the year after – so the OBR is expecting stronger growth in the next two years, but a slower recovery thereafter.Īubrey Allegretti : While Hunt quietly sets as much distance between this budget and Kwasi Kwarteng’s disastrous mini-budget last September, he still needs to demonstrate a commitment to Liz Truss’s watchword – growth.
Hunt says that will be followed by growth of 1.8% next year, 2.5% in 2025 and 2.1% in 2026. It is now expecting GDP to contract by 0.2%, instead of the 1.4% it predicted in November. Since the autumn statement, the OBR, along with many other forecasters, has become slightly less gloomy about the prospects for 2023. He says the OBR expects inflation, at 10.7% in Q4 of last year, to be 2.9% by the end of 2023 – meeting Sunak’s target of halving it. Hunt says this will be a budget for “long-term, sustainable, healthy growth”, and it will deliver “prosperity with a purpose”. But he struggles to avoid smiling as opposition MPs laugh at his support for swimming pools – after this Guardian story. He also announces a £63m fund to help leisure centres and pools afford their energy bills, and £100m extra for charities facing soaring costs.Īubrey Allegretti : Aware that energy prices are a big contributor to people feeling the strain, Hunt knows news that the energy price guarantee being kept at £2,500 from April until July will be welcomed.
He also announces extra help for those with prepayment meters, saying he will “bring their charges in line with comparable direct debit charges”. He says the measure would save the average family £160.Īs expected, Hunt extends the 5p cut to fuel duty made by Rishi Sunak last March, for another year. The chancellor says: “Some people remain in real distress, and we should always remain ready to help when we can.”
Cost of living supportĪfter a vigorous campaign from the consumer rights champion Martin Lewis and many charities, Hunt confirms that the energy price guarantee will remain at £2,500 until July – it had been set to rise to £3,000. To try to boost their spirits, he declares “inflation has peaked” and gets huge cheers for declaring a recession looks likely to be avoided. He nods to “difficult decisions” taken in the autumn and seeks to cajole grumpy Tory MPs by telling them “the plan is working”.
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