UK push to restore finances means higher taxes, energy bills

Nov 16, 2022, 10:42 AM | Updated: Nov 17, 2022, 9:38 am
People walk on Regent Street, in London, Thursday, Nov. 17, 2022. Millions of British people face h...

People walk on Regent Street, in London, Thursday, Nov. 17, 2022. Millions of British people face higher taxes and steeper energy bills after the government announced an emergency budget aimed at restoring the government’s economic credibility and shoring up the battered public finances. (AP Photo/Kin Cheung)

(AP Photo/Kin Cheung)

              People walk on Regent Street, in London, Thursday, Nov. 17, 2022. Millions of British people face higher taxes and steeper energy bills after the government announced an emergency budget aimed at restoring the government’s economic credibility and shoring up the battered public finances. (AP Photo/Kin Cheung)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              A woman rides a bike in London, Thursday, Nov. 17, 2022. The British government on Thursday unveiled an emergency budget featuring billions in tax increases in a bid to restore trust and stability in the U.K. economy and help millions struggling to cope with a deepening cost-of-living crisis. (AP Photo/Kin Cheung)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Kin Cheung)
            
              People walk on Regent Street, in London, Thursday, Nov. 17, 2022. The British government on Thursday unveiled an emergency budget featuring billions in tax increases in a bid to restore trust and stability in the U.K. economy and help millions struggling to cope with a deepening cost-of-living crisis. (AP Photo/Kin Cheung)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Kin Cheung)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Fallen leaves lie in Downing Street in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Kin Cheung)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Fallen leaves lie in Downing Street in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Kin Cheung)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Fallen leaves lie in Downing Street in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Kin Cheung)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Fallen leaves lie in Downing Street in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Kin Cheung)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Fallen leaves lie in Downing Street in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Fallen leaves lie in Downing Street in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Fallen leaves lie in Downing Street in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Britain's Chancellor Jeremy Hunt leaves 11 Downing Street to attend Parliament in London, Thursday, Nov. 17, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's budget while helping millions of people slammed by a cost-of-living crisis. Treasury chief Jeremy Hunt will deliver the government's plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Alastair Grant)
            
              Volunteers pack boxes with food for customers at the community food pantry in Vauxhall, London, Wednesday, Nov. 16, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's finances while helping millions of people slammed by a cost-of-living crisis as Russia's war in Ukraine pushes up energy prices and slows economic growth. Treasury chief Jeremy Hunt will deliver the government’s plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Frank Augstein)
            
              Volunteers pack boxes with food for customers at the community food pantry in Vauxhall, London, Wednesday, Nov. 16, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's finances while helping millions of people slammed by a cost-of-living crisis as Russia's war in Ukraine pushes up energy prices and slows economic growth. Treasury chief Jeremy Hunt will deliver the government’s plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Frank Augstein)
            
              A customer casts a shadow as she waits for the opening of the community food pantry in Vauxhall, London, Wednesday, Nov. 16, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's finances while helping millions of people slammed by a cost-of-living crisis as Russia's war in Ukraine pushes up energy prices and slows economic growth. Treasury chief Jeremy Hunt will deliver the government’s plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Frank Augstein)
            
              Customers queue with empty bags as they wait for the opening of the community food pantry in Vauxhall, London, Wednesday, Nov. 16, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's finances while helping millions of people slammed by a cost-of-living crisis as Russia's war in Ukraine pushes up energy prices and slows economic growth. Treasury chief Jeremy Hunt will deliver the government’s plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Frank Augstein)
            
              Anna Sjovorr-Packham prepares the food at the community food pantry in Vauxhall, London, Wednesday, Nov. 16, 2022. Just three weeks after taking office, British Prime Minister Rishi Sunak faces the challenge of balancing the nation's finances while helping millions of people slammed by a cost-of-living crisis as Russia's war in Ukraine pushes up energy prices and slows economic growth. Treasury chief Jeremy Hunt will deliver the government’s plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. (AP Photo/Frank Augstein)

LONDON (AP) — Millions of people across Britain face higher taxes and energy bills after the government on Thursday announced an emergency budget focused on restoring the country’s financial credibility and bolstering an economy battered by soaring inflation.

Treasury chief Jeremy Hunt unveiled a 55 billion-pound ($65 billion) package of tax increases and spending cuts designed to demonstrate that Britain is committed to paying its bills after his predecessor spooked financial markets by proposing tax cuts without saying how they would be paid for.

Hunt sought to cushion the blow by pledging to protect the most vulnerable, announcing that he would increase welfare benefits and state pension payments in line with inflation and help low-income residents with their energy bills. The government will also maintain investment in energy and infrastructure projects to boost economic growth, he said.

Even so, the government’s fiscal watchdog warned that Britons face a painful 7% fall in living standards over the next two years.

“The British people are tough, inventive and resourceful. We have risen to bigger challenges before,” Hunt told the House of Commons. “We aren’t immune to these headwinds, but with this plan for stability, growth and public services, we will face into the storm.”

Hunt and Prime Minister Rishi Sunak, who took office less than a month ago, face the challenge of tackling inflation and a growing deficit while helping millions of people slammed by a cost-of-living crisis as Russia’s war in Ukraine pushes up food and energy prices.

That task was made more difficult by former Prime Minister Liz Truss, who in September announced 45 billion pounds ($53 billion) in unfunded tax cuts that sent the pound to a record low against the U.S. dollar, boosted government borrowing costs and forced the central bank to intervene to stabilize bond markets. Truss was forced to resign six weeks after taking office.

A biggest criticism was that Truss’ policies were introduced before being reviewed by the independent Office for Budget Responsibility, a mistake Hunt and Sunak took pains to avoid.

The agency said Hunt’s proposals would help slow inflation, boost economic growth and rein in government spending over the next five years.

Even so, soaring prices will cut real wages and living standards by 7% over the next two years, even as the government spends an additional 100 billion pounds on support programs, the OBR said in its analysis of the budget and the state of the economy.

“This type of contraction has never been recorded in Britain’s postwar history,” said Barret Kupelian, a senior economist at PwC.

Declining incomes, rising interest rates and a drop in home prices will tip the economy into a recession lasting more than a year from the third quarter of this year through the middle of 2023, the OBR predicted. A recession is an extended period of economic contraction, often defined as two consecutive quarters of shrinking output.

Britain doesn’t have an independent body that declares recessions like in the U.S. and Europe, which use other data like rising unemployment and job losses in their assessments.

The OBR said U.K. unemployment is likely to rise to 4.9% in the third quarter of next year from 3.5% now. Inflation, which reached a 41-year high of 11.1% in October, will fall sharply over next year, dropping below zero in the middle of the decade before returning to the Bank of England’s 2% target in 2027, it predicted.

The grim economic picture is weighing on government finances, reducing tax revenue, driving up welfare spending and increasing borrowing costs. As a result, the OBR estimates that government borrowing will jump by a third to 177 billion pounds, or 7.1% of economic output, in the current fiscal year.

Borrowing will begin dropping after that, declining to 2.4% of gross domestic product in the 2027-28 fiscal year. That means government debt will rise to a 63-year high of 98% of GDP over the next three years before it begins to decline, the OBR forecast.

In an effort to close the gap, Hunt said he would ask “more from those who have more” and lower the threshold for the highest tax bracket — 45% — by almost 25,000 pounds a year, costing high-earners about 1,200 pounds annually.

The government also will freeze the income levels at which taxpayers move into higher tax brackets, effectively raising taxes for hundreds of thousands of workers as inflation pushes up their wages.

“This, along with a double whammy of high inflation and higher taxes could mean a potential pay cut rather than a pay rise,” said Faye Church, a chartered financial planner at Investec Wealth & Investments.

The government also bowed to public pressure to increase taxes on the huge profits of energy producers. Hunt raised the windfall tax on oil and gas companies to 35% from 25% and extended it to March 2028. Electricity firms will have to pay a new temporary levy of 45%.

Hunt said the taxes would raise a combined 14 billion pounds next year.

He promised to protect public spending on key areas such as health and education as well as investment in energy and infrastructure projects. He delayed major spending cuts until 2025 — after the next general election — and deferred key decisions such as whether to stick to the previous government’s promise to increase defense spending to 3% of economic output.

Pensioners and people on welfare benefits will see their payments increase in line with inflation, while millions of workers on minimum wage will get a 9.7% increase in April, Hunt said.

Millions of households face higher energy bills, however, when a price cap rises from 2,500 pounds a year for the average household to 3,000 pounds in April.

Hunt said he would soften the blow by increasing support payments for low-income families and those with disabilities.

Rachel Reeves, economy spokeswoman for the opposition Labour Party, said the budget would leave Britain in a “doom loop where low growth leads to higher taxes, lower investments and squeezed wages, with the running down of public services.”

Among those who are looking to the government for help is Magdelena Prosenic, a single mom of two young children who was waiting in line at a community food pantry in south London.

For 5 pounds, people can buy 20 items of fresh fruit, vegetables and essential items like tinned beans and pasta. But eggs, which have shot up in price, are in high demand, and there are only enough for those who come early.

“We are on benefits, but it’s hard to provide for two children without help,” Prosenic said Wednesday. “The kids need fruit, they need nappies and formula.”

Anna Sjovorr-Packham, who runs the pantry, said the numbers of families buying food from them is creeping up “slowly but steadily.” And the cold winter months are coming, when families need to spend more on heating.

“I think there was once an idea that people who access food pantries may need the service as a last-case scenario — there may be a stigma about the type of person,´´ she said. “But now the pantries are definitely utilized by everybody.”

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - A Boeing 747-8, Boeing's new passenger plane, takes its first flight, Sunday, March 20, 2011...
Associated Press

Boeing’s last 747 to roll out of Washington state factory

After more than half a century, Boeing is set to roll its last 747 out of a Washington state factory on Tuesday.
22 hours ago
FILE - Light illuminates part of the Supreme Court building at dusk on Capitol Hill in Washington, ...
Associated Press

Justices take up elections case that could reshape voting

WASHINGTON (AP) — The Supreme Court is taking up a case with the potential to fundamentally reshape elections for Congress and the presidency. The justices are hearing arguments Wednesday over the power of state courts to strike down congressional districts drawn by the legislature because they violate state constitutions. Republicans from North Carolina who are […]
22 hours ago
FILE - A sign in front of the Food and Drug Administration building is seen on Dec. 10, 2020, in Si...
Associated Press

Speedier drug approvals hit slowdown as FDA faces scrutiny

WASHINGTON (AP) — Expedited drug approvals slowed this year as the Food and Drug Administration’s controversial accelerated pathway came under new scrutiny from Congress, government watchdogs and some of the agency’s own leaders. With less than a month remaining in the year, the FDA’s drug center has granted 10 accelerated approvals — fewer than the […]
22 hours ago
Miami Dolphins quarterback Tua Tagovailoa (1) looks to pass before San Francisco 49ers defensive en...
Associated Press

Tagovailoa, Zaporizhzhia make list of most mangled words

BOSTON (AP) — “Miami Dolphins quarterback Tua Tagovailoa explained the significance of the Chicxulub impact crater to actor Domhnall Gleeson over a drink of negroni sbagliato in the Ukrainian city of Zaporizhzhia,” is the kind of sentence that just might tie your tongue up in knots. It contains five examples from this year’s list of […]
22 hours ago
Associated Press

Today in History: December 7, Japan attacks Pearl Harbor

Today in History Today is Wednesday, Dec. 7, the 341st day of 2022. There are 24 days left in the year. Today’s Highlight in History: On Dec. 7, 1941, the Empire of Japan launched an air raid on the U.S. Navy base at Pearl Harbor in Hawaii as well as targets in Malaya, Hong Kong, […]
22 hours ago
(AP Photo/Paula Bronstein, File)...
Associated Press

Inslee touts new housing program for Spokane’s homeless

Washington Gov. Jay Inslee was in Spokane Monday to preview the opening of a new housing project for homeless people, calling the Catalyst Project a step toward ending the state’s homelessness crisis.
22 hours ago

Sponsored Articles

Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
UK push to restore finances means higher taxes, energy bills