Announcing a half-yearly budget update overshadowed by the conflict in Ukraine, Sunak set out measures that would inject about £17.6 billion into the economy in the coming financial year.
In response to the hit to living standards - with inflation seen peaking at nearly 9% in late 2022 - Sunak said he was increasing the threshold at which workers start to pay national insurance, or social security, contributions by £3,000 from July. In his Spring Statement, Sunak announced a cut in fuel duty of 5 pence per litre, to start later today and last until March next year.
The OBR also said living standards, adjusted for inflation, would not recover their pre-pandemic levels until the 2024/25 financial year and would suffer their biggest contraction in the 12 months from April since at least the mid-1950s. The forecasts drawn up by the OBR showed the economy was likely to grow by 3.8% in 2022, a sharp slowdown from a forecast of 6% made in October.