What to expect from today's Autumn budget statement
Jeremy Hunt will give his first budget since becoming Chancellor
Last updated 17th Nov 2022
Today Jeremy Hunt will give his first budget statement since he became Chancellor, but what's expected to be in it?
The Autumn Statement is the first big budget announcement in parliament since Kwasi Kwarteng's mini-budget during Liz Truss's time as Prime Minister. It's also the first budget since Rishi Sunak became Prime Minister.
Many of the items announced in Kwarteng's mini-budget have already been cancelled, but many families across the UK will be carefully listening today as they struggle financially during the cost of living crisis.
What will be in today's budget?
The Autumn Statement looks likely to be grim listening for many, although no announcements have been officially confirmed yet.
The Chancellor is trying to find £54 billion from a combination of tax rises and spending cuts.
Will there be tax rises in the Autumn Statement?
Chancellor Jeremy Hunt has already said that “difficult decisions” are coming on tax, in fact earlier this week he said "we're all going to be paying a bit more tax".
It is widely expected that the Chancellor will seek to raise finances through stealth taxes by freezing the rates in which workers begin paying higher rates of tax. Put simply, inflation and pay increases will mean more people being dragged into higher bands.
Also believed to be under consideration is a plan to hike the amount that local authorities can increase council tax by without holding referendums.
The threshold for when the 45% rate of income tax kicks in for the highest earners could also potentially be decreased from £150,000 to £125,000.
Are the government planning spending cuts?
Spending cuts across most if not all Government departments are expected in today's Autumn Statement, although all eyes will be on whether health and defence spending are protected from the brunt of savings.
Any cuts could prove painful to already stretched public services and Mr Hunt is likely to seek to claw back revenue through tax rises.
Will energy bills be part of today's statement?
Rising energy bills are one of the key factors for inflation rising to a 41-year high yesterday so are likely to be mentioned today.
Mr Hunt is expected to make the support plan for energy bills less generous from April, instead switching to more targeted measures in order to save the Treasury billions, while he is also considering increasing the windfall tax on oil and gas giants from 25% to 35% while also expanding the levy to electricity generators.
What else is likely to be mentioned in today's budget?
The cap on social care costs announced by Boris Johnson could also be delayed by at least two years, although campaigners have already flagged concerns about any such decision.
Mr Hunt is also expected to follow his predecessor Mr Kwarteng and lift the cap on bankers’ bonuses.
What will not be in the budget?
No one should be expecting major giveaways in this budget, amid fears of a return to austerity.
And unlike Mr Kwarteng’s mini-budget, Mr Hunt is unlikely to come offering good news about the UK’s economic forecasts nor with any “rabbits from hats” as budget surprises are often dubbed.
Will pensions be changed?
It's impossible to know for sure what will be mentioned today, but Prime Minister Rishi Sunak did hint that the triple lock on pensions could be protected as he said that pensioners were at the “forefront” of his mind ahead of the Autumn Statement.
The cost of living crisis in pictures
Interest rates and inflation go up
Inflation rose by 8.8% in the 12 months to January 2023, down from 9.2% in December 2022. With interest rates also rising to 4%, those saving money will earn more interest on their finances, whilst those paying mortgages would pay more interest to the bank.
Energy bills
The price of energy went up incredibly as the cost of living crisis hit, with the gas price spike caused largely by the war in Ukraine. The price cap - which is set by an independent regulator to help offset costs onto customers - was set to rise to £3,549 for an average home in October but a price freeze from the government restricted the typical bill to £2,500. That's still an increase of 27% from the previous energy cap and as it's a cap on unit cost, the more energy you use the higher your bill will be.
Food prices
The cost of a weekly shop also has gone up as a result of the cost of living crisis. As a result of the war in Ukraine, a number of products including cooking oils and wheat have been disrupted. This means that several products are now considerably more expensive, driving bills up for customers.
Prices at the pumps
The average cost of petrol has also rose to unprecedented levels. Supply lines for petrol have been thrown into doubt as a result of the war in Ukraine, as Russia is a large export partner for gas, oil and fuel. In April 2022, the average price for a litre of petrol on the forecourt was 160.2p, whilst a litre of diesel would cost 170.5p. By late June 2022 the price had risen to an average of 190.9p for a litre of unleaded and 198.9p for a litre of diesel. In March 2023 the price wass on average of 147.03 in petrol and 167.04 in diesel.
Average cost of filling up a car with petrol hits £100
On 9th June 2022, the average cost of filling up a car with petrol hit £100 for the first time ever. Diesel had already hit that milestone. It comes as the cost of fuel hit a record high of one pound eighty a litre. The 2p rise was the biggest daily jump in 17 years. Prices have dropped by at least 20p per litre since the high point.