The big story of Wednesday’s spring statement by the Chancellor will be the impact of inflation – which has soared from almost zero just over a year ago to perhaps 10 per cent in coming months – on living standards and the public finances.
I expect Rishi Sunak to provide limited protection from the ravages of inflation to those on low and middling incomes, probably by increasing universal credit and the threshold for paying national insurance.
But quite how far the Chancellor inflation-proofs the take home pay of low earners will be the most important question he will answer tomorrow.
Inflation that makes all of us poorer will create the illusion of making the public finances seem stronger
Either way, such support is likely to cost more than £10 billion – four or five times more than he is likely to spend on another expected measure to ease the cost of living surge, namely knocking 5p off the duty on a litre of petrol.
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