Spring Budget 2024
Jeremy Hunt says the UK economy has dealt with the financial crisis, the pandemic and energy crisis caused by war in Europe. He acknowledges that interest rates “remain high as we bring down inflation”, but adds: “We can now help families not just with cost of living support but with permanent cuts in taxation.” He calls it a “budget for long term growth”.
At the beginning of 2023 the Prime Minister set out five priorities, three of which were economic: to halve inflation, grow the economy and get debt falling. At Spring Budget the government is delivering on these priorities: inflation has fallen, growth has been more resilient than expected, and debt is forecast to fall.
Inflation has more than halved from its recent peak and the government is continuing to support the Bank of England, with policy decisions at this event directly reducing inflation in 2024-25. The OBR forecasts inflation to fall to its 2% target in Q2 2024, a year earlier than in their November 2023 forecast.
As a result of falling inflation, real wages are rising. The OBR now expects living standards, as measured by real household disposable income (RHDI) per person, to grow by 0.8% in 2023-24 and continue to grow in each year of the forecast. In the latest data, people’s real incomes were around £1,100 higher than the OBR expected in their March 2023 forecast.
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