Chancellor of the Exchequer Rishi Sunak will make his spring declaration before the House of Commons on Wednesday.
Normally that would just mean releasing new economic numbers, but many people want him to go further and announce measures to deal with the soaring cost of living.
Presenting his budget in October, Mr Sunak said the UK economy was expected to grow by 6% in 2022 as it recovered from the pandemic.
But a lot has happened since then.
The cost of living has continued to rise for a number of reasons – most notably the rise in oil and gas prices.
Meanwhile, the war in Ukraine could push food and energy prices even higher.
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The Bank of England has warned that inflation could reach 8% in the coming months and stay higher for longer.
If prices rise too much, consumers could be discouraged from spending, which in turn could hamper economic growth.
Higher costs could also mean that companies decide to delay investments.
Under these circumstances, the Chancellor could be forced to act given the speed at which things have changed.
Fuel tax reduction
Gasoline and diesel prices have skyrocketed in recent weeks, made worse by Russia’s invasion of Ukraine.
More than 50 Conservative MPs have called for a reduction in the fuel tax – which currently stands at 57.95p per liter (with VAT on top of that at 20%).
Several newspapers have reported that Rishi Sunak is considering a temporary cut of up to 5p a liter.
But opposition MPs have questioned whether this would go far enough – Shadow Chancellor Rachel Reeves suggests a 5p cut would reduce filling a car with petrol by just £2.
increase pensions
Experts warn that rising costs could hit those who depend on the state pension particularly hard.
Statutory pensions typically increase each year by the highest rate – inflation, average wage increases, or 2.5%. This is known as a triple lock.
However, last September the government suspended the triple lockdown over concerns about how quickly wages would rise.
Since then, costs have skyrocketed. Inflation, which measures how the cost of living increases over time, is now at a 30-year high of 5.5%.
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Laura Suter, head of personal finance at AJ Bell, suggests the chancellor could temporarily offer targeted support or commit to reintroducing the wage element into the triple lockdown from April 2023.
Increase benefit payments
Next month, the government will increase benefits like Universal Credit by 3.1%, but dozens of charities want the chancellor to go further.
The Trussell Trust, which runs a large network of food banks across the UK, called the government’s proposed increase “dangerously insufficient”.
Together with Save the Children UK and the Child Poverty Action Group, she has urged Rishi Sunak to increase benefits by at least 7%.
Universal Credit claimants were given an extra £20 a week during the pandemic, but this ended in October.
The government has defended the decision to scrap the increase, saying it plans to extend the eligibility of the Warm Homes Discount to reduce energy bills.
Delaying the increase in social security
Business leaders and politicians from various parties have called on the chancellor to postpone a planned increase in social security payments to fund health and social care.
From April, white-collar workers, bosses and the self-employed are to pay 1.25p more per pound from their pay package.
The move has been criticized as being unfair to low-income earners, especially as the cost of living increases. For example, an employee who makes £20,000 a year pays an additional £89 a year.
Business trade groups have also suggested it could be the “last straw” for businesses struggling to cope.
Prime Minister Boris Johnson and Chancellor Rishi Sunak wrote in the Sunday Times in January that this is the “right plan” and “needs to be implemented” to close the NHS backlog.
Since then, there have been reports that the chancellor, rather than scrapping the increase altogether, may be raising the point at which people start paying.
Analysis by the think tank Resolution Foundation suggests that raising the threshold to £12,500 would mainly benefit middle earners.
But it said coupled with an increase in benefits, it could “provide families with a much-needed respite in the coming year”.
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