What is the Autumn Statement and how it can affect you?

Millions of people's take-home pay and household budgets are impacted by the Autumn Statement, which also outlines the amount that will be allocated to important public services.

When is it?

On Wednesday, November 22, 2023, Chancellor Jeremy Hunt will present the Autumn Statement in the House of Commons.

Usually, the speech takes place during lunch.

Importance

One of the most important financial occasions on the political calendar is the Autumn Statement.

Based on the most recent projections from the Office for Budget Responsibility (OBR), the chancellor informs MPs on the state of the nation's finances as well as the government's plans for taxes and public spending.

The impartial Office for Budget Responsibility (OBR), which monitors the state of the economy, will give Parliament its own evaluation of Hunt's plans.

Challenges the UK economy faces

High inflation persists

Although the rate of inflation, or how quickly prices are rising, has declined since peaking at 11.1% in October 2022, households are still feeling the pinch.

Inflation as measured by the CPI decreased to 4.6% in October from 6.7% in September.

The government promised to cut inflation in half by the end of 2023 January.

Although the October CPI figure indicates that it will, the rate of inflation is still more than twice the 2% target set by the Bank of England.

Growth is slowing

In an effort to contain inflation, the Bank of England has raised interest rates fourteen times since 2021; however, there are worries that the increases have slowed economic expansion.

According to official figures, growth stalled between July and September.

The Bank predicts that there won't be any growth in the UK until 2025 and that interest rates will stay high, if not climb even higher.

Government debt is skyrocketing

The cost of borrowing for the government has been rising, which means the Treasury must repay more debt interest.

Some speculate that this might reduce Hunt's available funds for public services or make tax reduction more difficult.

What may be within the statement:

• Pensions
• First-time buyers
• Income tax cuts
• Green stamp duty rebate
• ISAs

(Sources: bbc.co.uk)