| The Chancellor set out seven pillars for growth focused on stability, investment, skills, innovation, regional development, industrial strategy, and Net Zero. | The OBR forecasts modest GDP growth of 1.1% in 2024 and 2.0% in 2025, with inflation averaging around 2.5–2.6%. | Cost-of-living support includes higher minimum wages, a fuel duty freeze, increased Carer’s Allowance limits, and £1bn for local hardship funding. |
Economic forecasts
The Chancellor stressed that every Budget she delivers “will be focused on our mission to grow the economy” and outlined seven pillars that will form the government’s growth policy priorities. Key among these is restoring economic stability and increasing investment, while other areas include boosting regional growth, improving skills across the workforce, creating an industrial strategy, driving innovation and transitioning to Net Zero.
Ms Reeves then unveiled the Office for Budget Responsibility’s (OBR’s) latest economic projections, which suggest the economy will expand slightly faster than previously expected both this year and next, before easing off from 2026 onwards. The new forecast predicts the economy will grow by 1.1% in 2024 and 2.0% next year, before falling back to 1.6% by the end of this Parliament. Overall, the OBR noted that, although the policies in the Budget will ‘temporarily boost’ the economy, the overall level of output will be ‘broadly unchanged’ over the five-year forecast period. Inflation is predicted to average 2.5% this year and 2.6% in 2025.
Cost-of-living measures
The Chancellor acknowledged the burden that the cost-of-living crisis has placed on working people, and committed to:
- Increasing the National Living Wage (NLW) from £11.44 to £12.21 per hour from April 2025 – a 6.7% increase
- Increasing the minimum for 18 to 20-year-olds from £8.60 to £10 per hour (over time, the intention is to create a single adult NLW rate)
- Freezing fuel duty for one year and extending the temporary 5p cut to 22 March 2026
- Increasing the weekly earnings limit for Carer’s Allowance to equate to 16 hours at the NLW rate
- Providing £1bn for local authorities to support those in immediate hardship and crisis.
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All details are believed to be correct at the time of writing (30 October 2024)
