MNI BRIEF: UK Budget Measures Aim To Boost Supply Side

The headline policy measures in the spring UK Budget were a mix of a widely trailed extension to household energy price support, a set of steps which collectively will knock around 0.75 percentage point off inflation this year alongside a raft of supply side reforms and a tax break designed to boost business investment.

The measures are designed to strengthen the economy while alleviating inflationary pressure, with a mix of a three-month extension of the household energy price guarantee and a freeze on fuel and alcohol duty combined set to lower CPI inflation by almost 0.75 pp and other measures designed to tackle rising economic inactivity, Chancellor Jeremy Hunt said. These measures will be closely eyed by the Bank of England ahead of their March 23 meeting.

In another attempt to boost the supply side Hunt set out plans to try and reduce declining labour force participation, with a raft of steps including a support package for disabled people seeking work, a scheme for those who leave work due to health conditions and a pre-announced extension of childcare.