Spring statement 2022: key points at a glance

Rishi Sunak has delivered his mini-budget - here are the main points, with political analysis

• Spring statement: what it means for you
• Sunak lowers fuel duty by 5p and promises income tax cut
• UK living standards to fall at fastest rate since mid-1950s'

Rishi Sunak opened by highlighting the war in Ukraine and said Britain's economic strength underpinned freedom and liberty. The chancellor said he would respond to the conflict by building a stronger, more secure economy for the UK.

The chancellor said forecasts from the Office for Budget Responsibility showed the economy would grow by 3.8% this year.

GDP would grow by 1.8% next year, 2.1% in 2024, 1.8% in 2025, and 1.7% in 2026.

In October, the OBR had forecast growth of 6% f0r 2022 as the UK economy recovered from the Covid pandemic.

The economy grew by 7.5% in 2021, after a fall of 9.4% in 2020 - the biggest decline for a century - during the first wave of the pandemic.

The chancellor said the OBR forecast that inflation would average 7.4% this year.

Fuel duty will be cut for only the second time in 20 years, by 5p a litre for a full 12 months.

Sunak said the fuel duty cut was worth 5bn and would take effect from 6pm on Wednesday.

The government will cut to zero a 5% VAT rate for households installing solar panels, heat pumps or insulation.

Sunak said he would double the government's household support fund to 1bn.

Sunak said borrowing in the current financial year, 2021-22, would be 5.4% of GDP, and would fall to 3.9% next year.

In cash terms, the OBR estimated the budget deficit - the gap between spending and income - would be 127.8bn in 2021-22, and 99.1bn next year.

In its previous forecasts in October, the OBR had estimated borrowing would be 7.9% of GDP, or 183bn in cash terms, in 2022-23.

The chancellor said debt service costs would rise to 83bn in the next fiscal year, the highest level on record.

Public sector net debt was forecast to be 95.6% of GDP in 2021-22, and then to fall gradually to 83.1% of GDP by 2026-27.

Sunak said the planned 1.25-percentage-point rise in national insurance contributions must remain, as a dedicated funding source" for health and social care.

However, he announced he would increase the threshold by 3,000 this year, up from a planned rise of 300. This equalises the national insurance contributions threshold with the personal income tax allowance of 12,570.

He calls it a 6bn personal tax cut for 30 million people, and the largest single personal tax cut in a decade.

Sunak announced changes to research and development tax credits, saying the generosity of reliefs for business investment would be increased to boost UK productivity.

The chancellor said something is not working" with UK investment in productivity.

He said the government would cut tax rates on business investment at the autumn budget.

The chancellor said he would increase the employment allowance for small businesses to 5,000 - a tax cut worth up to 1,000 for half a million small firms starting in two weeks' time.

Sunak said the basic rate of income tax would be cut from 20% to 19% in 2024.

He said it would not be responsible to make such a tax cut right now, given the uncertainty in the economy.

Tax cuts must be paid for, they must be prioritised and they must fit the economic circumstances of the time," he said.

The chancellor said it would be the first cut in income tax for 16 years.