Spring statement

Hunt names Budget date as general election looms

Jeremy Hunt
Jeremy Hunt: hoping for better conditions

Chancellor Jeremy Hunt has announced that the Spring Budget will take place on 6 March, the last before a general election.

The Office for Budget Responsibility (OBR) will prepare an economic and fiscal forecast to be presented to Parliament alongside his statement which is expected to include some tax cuts.

It will follow publication of data for the last three months of 2023 which will determine whether the economy has entered a recession, which is defined as two consecutive quarters of contraction. In the third quarter it contracted by 0.1%. 

On the upside, the chancellor will be hoping that the Bank of England will relax some of the pressure on households and businesses by cutting rates from 5.25%, their highest level in 15 years on a bigger than expected fall in inflation. Markets are pricing in a quarter-point cut in rates by May and a fall to 4% by the end of the year.

An improving energy price market is providing further grounds for optimism. According to the Office for National Statistics, gas prices fell 31% in the year to November. Lower costs will be key to improving profitability and confidence.

While households face a rise in energy bills next month under Ofgem’s latest price cap, annual energy bills are expected to fall by £268 in April, according to forecasts from the consultancy firm Cornwall Insight.

Data on Friday showed that retail sales rose in November at the fastest pace since the start of the year. The quantity of goods sold increased by 1.3% on the previous month compared with estimates of 0.4%.

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