‘The Spring Statement Was a Small Concession to the Huge Cost of Living’

The chancellor Rishi Sunak set out his plan to address the cost-of-living crisis yesterday, announcing that the threshold for National Insurance will rise by £3,000. He also warned that the economic growth this year would be lower than predicted and that inflation could rise to 7.4 per cent. 

Here Senior Lecturer in Applied Economics and Business Statistics and Deputy Dean (Accreditations & Medway) Dr Catherine Robinson gives her view on the Spring Statement:

“I think there was little expectation the chancellor could do much in the face of rising costs and huge uncertainty but he certainly didn’t think outside the box. It wasn’t a ground-breaking announcement, but we will probably be less badly off than we feared.

“The uplift of the National Insurance threshold down to the same level as the Income Tax threshold will help at the lower end of wage earners. That said, those on fixed incomes will find it a difficult time. On the whole, it was designed to offer a small concession to the massive cost of living rise but not enough to genuinely make a difference and people are still nervous. The promise of the tax cut in the future I think was ‘a carrot’, as such.

“It’s widely recognised we are heading into difficult times in the next few years in terms of costs of living, some of the fundamentals are good – the vacancies rate is high but there are still challenges and inflation that was going on prior to the war in Ukraine, that has now been exacerbated.

“I think Sunak was particularly constrained, he is in a challenging place, given the government’s focus on levelling up – this will not make levelling up any easier.”

Dr Catherine Robinson is Deputy Dean (Head of KBS Medway) and Senior Lecturer in Applied Economics and Business Statistics at Kent Business School.

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