UPDATE: To read the ten key takeaways from today's Budget, click here.
Rishi Sunak will use his budget statement today (27 October) at 12h30 to insist the UK is entering an economic "age of optimism" as upgraded growth forecasts give the UK chancellor the chance to unveil extra public spending, according to reports.
Rishi Sunak is expected to use up to £30bn from the proceeds of faster growth to invest in public services and reduce borrowing when he unveils his budget on Wednesday (27 October), The Times said.
Sunak will brandish new official forecasts showing that the UK economy has grown faster than expected this year and that long-term Covid-19 "scarring" of the economy will be less severe than feared, giving him fiscal room for manoeuvre.
The economy is now predicted to grow by about 7% this year, the chancellor is expected to say, The Times reports. This is nearly twice as much as the 4% predicted by the Office for Budget Responsibility in its March forecast.
Sunak is expected to claim that the better-than-expected economic performance will allow the country to go forward to a "new age of optimism" and pledge to create a long-term higher wage, higher skilled economy.
"Today's Budget begins the work of preparing for a new economy post-Covid," Sunak will say, the FT reports. "An economy of strong public services, vibrant communities and safer streets."
The Chancellor will deliver his third budget today (27 October) at 12h30 and is not expected to renege on scheduled tax hikes.
Among the spending measures expected to be announced today are: About £1.7bn for local councils in deprived areas to spend on improvements to local infrastructure from the government's levelling-up fund and a £1bn fund to help courts to catch up with the Covid backlog and extra resources for prosecutors.
"In today's budget, the Chancellor should look to boost employment, pay and the public finances by addressing the one thing that will drive all three - sustainable growth," urged Neil Carberry, chief executive of the Recruitment and Employment Confederation (REC).
Sunak is also expected to unveil a flagship measure to help families hit by the £1,000 cut to universal credit, having already made £30bn of spending announcements, or reannouncements, across the health service, housebuilding, crime-fighting, transport and skills.
Policies already announced include £5.9bn for NHS England and pay rises across the public sector and England's city regions will receive £6.9bn to spend on train, tram, bus and cycle projects. This includes £1.07bn for Greater Manchester, £1.05bn for the West Midlands and £830m for West Yorkshire.
Sunak is set to announce a rise in the National Living Wage from £8.91 per hour to £9.50, to come into effect from 1 April next year. This is a 6.6% increase in the minimum wage for all those aged 23 and over - more than twice the current 3.1% rise in the cost of living.
Assuming a 40 hour week, the new minimum wage amounts to a salary of £1,646 per month or £19,760 a year.
The former Treasury minister David Gauke told the BBC: "There are still some real challenges for the economy: we may well be seeing a slowdown, there are risks with inflation [and] potentially a trade war with the EU. I suspect the chancellor will have good news in the short term but be fairly cautious with it."
The government's major tax change has already been announced, as earlier this year the prime minister told MPs he would introduce a tax in England designed to tackle the NHS backlog caused by the Covid pandemic and later to pay for social care.
Some £2.6bn will be spent on creating 30,000 new school places for children with special educational needs and disabilities. Grants worth £1.4bn will be given to "internationally mobile" companies to invest in UK infrastructure.
