Liz Truss's government is expected to slash taxes and announce measures to boost growth in the economy in a mini budget later today.
The Chancellor Kwasi Kwarteng will address MPs in the House of Commons about what support will be available to families and businesses to get through the cost of living crisis.
Kwarteng's statement comes after the Bank of England hiked interest rates to 2.25 per cent from 1.75 per cent and warned the economy is already in a recession.
Ahead of the announcement the Chancellor revealed the National Insurance hike introduced by former Chancellor Rishi Sunak would be reversed on November 6. Kwarteng confirmed that he was cancelling the 1.25 percentage point increase.
He said: "Taxing our way to prosperity has never worked. To raise living standards for all, we need to be unapologetic about growing our economy.
"Cutting tax is crucial to this - and whether businesses reinvest freed-up cash into new machinery, lower prices on shop floors or increased staff wages, the reversal of the levy will help them grow, whilst also allowing the British public to keep more of what they earn."
Here's all you need to know about the mini budget:
What to expect
As with many financial statements a lot of it has been briefed to journalists well in advance of the Chancellor getting to his feet to deliver more detail.
During the Conservative leadership contest Truss announced a number of measures that she hoped to put in place if she defeated Rishi Sunak. In a bid to halt record-high inflation and boost growth in the economy the government is expected to slash taxes.
Some of the measures expected are:
- Income tax : A cut in the basic rate of income tax is expected, however income tax is devolved to the Scottish Parliament therefore it could put pressure on Nicola Sturgeon to follow suit.
- Universal Credit : The Truss government wants to get "Britain working again" which means it could shake up the benefits system in the budget.
- Green levies: Throughout the leadership contest Truss said she would scrap green levies which is expected to save households around £150 each.
- Corporation tax: The planned rise of corporation tax from 19 per cent to 25 per cent set for April next year is set to be scrapped during the announcement.
- Banker bonuses : It's believed the cap on bankers' bonuses could be lifted by Kwarteng.
What opposition parties are saying
The SNP is calling for targeted support for struggling families instead of giving tax breaks to the richest in society during a cost of living crisis.
Alison Thewliss, SNP Shadow Chancellor, said: "Today, the Chancellor must U-turn on unacceptable Tory plans to raise the energy price cap yet again to £2,500 - and instead introduce a real freeze on bills as part of a comprehensive package of support for families and small businesses.
"Instead of wasting billions of pounds of taxpayers' money in tax breaks for the rich and big business, the UK government must focus on ordinary families - with targeted support for low and middle income households and small businesses. This must include reversing Tory cuts to Universal Credit, introducing a Real Living Wage, scrapping the benefit cap and emulating the progressive approach of the SNP government's Scottish Child Payment.
"And instead of forcing taxpayers' to foot the bill for an energy company bail out, the UK government must introduce a windfall tax on excess profits so multi-billion pound companies pay their fair share."
Labour questioned whether the Government is "seeking to hide" from scrutiny by not asking for an economic forecast of its "mini budget".
Shadow Commons leader Thangam Debbonaire asked about the Chancellor's announcement planned for Friday, telling MPs: "Members will only have what looks like a few hours to scrutinise it and there is no accompanying briefing from the Office for Budget Responsibility.
"Just changing the name doesn't really change what it is or the need for those economic briefings. I have to ask what is it the Government is seeking to hide?
"Can she answer why we are only getting half a day and will there actually in fact be any economic forecasts made tomorrow?"
What time is the mini budget?
Chancellor of the Exchequer Kwasi Kwarteng is expected to get to his feet in the House of Commons on Friday, September 23 at 9.30am.
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