Spring Statement 2022 - our economist's view
InsightsThe Chancellors Budget and Forecast StatementsThe Chancellor's Spring Forecast Statement 2022
Spring Statement 2022 - our economist's view
Chancellor Sunak confirmed that 2022 is going to be a difficult year for the economy. As expected, the OBR slashed growth projections for 2022 from a previously inflated 6% to 3.8%. Meanwhile, inflation is expected to average 7.4% for the year.
"The impact of sanctions on Russia will be deeply felt across all incomes. Even with the measures taken, UK households are still facing an uphill battle.
Overall, inflation is set to cost c.£2,200 as inflation in real spending power for the average UK worker and double that per average working household.
For all the upbeat tone, after the promise to cut basic rate tax by 1% from April 2024, the Chancellor dramatically warned that he expects public finances and economic performance to worsen. Businesses should prepare for higher costs and decreased demand.
Consumers need to be prepared for surprise expenses related to energy. And policymakers need to be prepared for high inflation beyond their control."
George Lagarias - Chief Economist
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George Lagarias Chief Economist London
Liz Ritchie Head of Tax Edinburgh
The Chancellor's Spring Forecast Statement 2022
Commentary and analysis for The Chancellor's Spring Forecast Statement - 23rd March 2022
Cut to income tax rates - What this means for you
The Spring Statement ended in a dramatic fashion with the Chancellor announcing a cut to income tax rates by 1% to help share the growth amongst all and produce a total saving of £5 billion. Although, it was somewhat less impressive to hear that this would not be implemented until April 2024.
The cut and reform of business taxes
The government announced a new Tax plan that had three main aims. One of the main aims was to create a culture of enterprise and the conditions for private sector-led growth.