Chancellor Jeremy Hunt will submit his Budget to parliament today, as he seeks to provide clarity on how Rishi Sunak's government plans to weather the economic "storm".
He is now widely expected to unveil a £25 billion package of tax hikes and £35 billion in spending cuts to plug a £60 billion funding black hole in the Treasury coffers and convince global markets that the UK remains a trusted trading partner.
He will tell lawmakers his remarks will put Britain on a "balanced path to stability" as he tackles the "enemy" of inflation, which has soared to a 41-year high.
Mr Hunt would say his "tough decisions" were needed to keep mortgage rates low and tackle the sky-high energy and food prices that are exacerbating a cost-of-living crisis.
It came after Bank of England Governor Andrew Bailey said that the UK economy had seen a "dramatically" worse recovery from Covid than the US and EU.
Round-up: What can we expect from the Fall statement?
Apart from £24 billion in tax increases and £30 billion in spending cuts over the next five years, what else can we expect from Mr Hunt's Autumn statement today?
• Hunt will reduce the rate at which people pay the 45p income tax rate from £150,000 to £125,000.
• Local authorities will be allowed to increase council tax by 5 percent without a local referendum.
• Chancellor is expected to confirm that allowances will increase in April in line with inflation. He is also expected to protect triple keys for retirees.
• Most of the spending cuts are planned after the next election, The Times reports. This is in the hope that a boosted economy will obviate the need for cuts.
• Billions will be spent on insulating UK homes and upgrading boilers in a bid to reduce energy demand, Bloomberg reports. A task force will reportedly oversee the program, which will include new funding from 2025 to 2028. A public information campaign to encourage people to reduce energy consumption is also expected to be carried out.
• The household energy price cap is expected to rise from £2,500 to around £3,000 or £3,100, The Guardian reports. They also report that Mr Hunt will announce further windfall taxes on oil, gas and power companies.
• The NHS will likely be given more money to deal with the high inflation that is eating away at their budgets.
• The rate at which businesses must register for VAT, inheritance tax, capital gains tax and lifetime retirement benefits will be frozen, according to The Telegraph.
The think tank is expecting 'very bad economic news' today
Torsten Bell, chief executive of the Resolution Foundation think tank, said he expected some "very bad economic news" today.
Mr Bell told Sky News that Britain faced "a bleak economic outlook", with the economy growing very slowly and "may end this Parliament as weak as it started". He added that it would be "much weaker than we previously anticipated".
The head of the economic think tank said he expected unemployment to increase, "which is the opposite of what we have seen in the past".
Mr Bell added that the tax increase would mostly hit middle- and higher-income households, but that low-income households are seeing "the highest levels of inflation to date and finding the cost-of-living crisis the hardest to deal with". This article was written by EDUKASI CAMPUS.