“Back To Work” Budget Announced By UK Chancellor
Wednesday 15th March 2023 – 14:30 (GMT)
UK Chancellor Jeremy Hunt has delivered his first budget to the House of Commons in what is being dubbed the “back to work” budget. Mr Hunt announced key measures to help working parents navigate childcare costs, whilst also offering bigger tax incentives for those approaching retirement age.
Highlights include:
- Energy price cap of £2,500 to be extended to June, along with no penalties for those on prepayment meters
- UK inflation forecast to fall to 2.9% by end of year, helped by lower energy prices
- Petrol and diesel tax rise scrapped whilst keeping last years 5p cut in fuel duty
- Corporation tax increase from 19% to 25% going ahead as planned in April
- 30 hours of free childcare extended to children aged between 9 months and 2 years, phased in by 2025
- £1mn lifetime pension allowance scrapped along with increase of tax free contributions from £40,000 to £60,000 per year
- Defence spending to rise by £11bn over next five years
- £1bn of funding for 12 new low-tax zones, designed to drive economic growth and reduce regional disparities
Chancellor Hunt also revealed the latest forecasts from the Office for Budget Responsibility who now predict the UK will avoid a technical recession. The OBR also stated the upcoming economic downturn will be shorter and shallower than previously thought.
Sterling demand remained mixed following the various announcements – trading 0.7% lower against the US dollar and 1% higher against the euro. Attentions now turn to tomorrow’s interest rate announcement by the European Central Bank who are expected to increase their base level by up to 50 basis points.