"Not so much a rabbit pulled out of a hat as a slightly tatty-looking ferret dragged from a box", was how Hargreaves Lansdown described the chancellor's mooted 2p national insurance cut ahead of the event.
The flagship policy did indeed emerge from this week's Spring Budget, but there were some other nuggets too, as well as claw backs.
The Budget was likely the last one before the next general election but it came against the backdrop of the economy being declared in recession at the end of last year, leaving Jeremy Hunt little wiggle room for any real giveaways.
It also came in the wake of a warning from the International Monetary Fund that Hunt should prioritise spending in areas such as health, education and tackling climate change over cutting taxes.
As Pierre-Olivier Gourinchas, IMF chief economist, told sister title the Financial Times the UK’s focus should be on “the path towards a fiscal consolidation” rather than on adding to cuts already announced at the last Autumn Statement.
The IMF predicted the UK economy would expand by a mere 0.6 per cent in 2024 and said Hunt should instead be “trying to rebuild fiscal buffers...in the context in which there are important spending needs”.
The UK economy has since entered a recession but it is not all doom and gloom.
The Office for Budget Responsibility expects inflation to drop below 2 per cent in the autumn, while GDP is forecast to expand by 0.8 per cent this year.
Hunt said this meant inflation would fall below the 2 per cent Bank of England target one year ahead of schedule.
The GDP forecast also represents an uptick in the growth rate of 0.1 per cent for this year, and 0.5 per cent for next year when it is expected to reach 1.9 per cent.
The forecast growth rate for 2026 is 2.1 per cent.
The chancellor dubbed his Budget a “tax-cutting Budget” and a Budget for "long-term growth". Perhaps the main announcement was his second cut to national insurance since the autumn.
Further national insurance cut
The chancellor announced cuts to national insurance by a further 2 percentage points, bringing the main rate down to 8 per cent and amounting to about £450 a year in savings for the average worker – though bigger savings are afforded to those earning more.
The chancellor has also cut national insurance for the self-employed, with rates falling from 8 per cent to 6 per cent. It comes in addition to the cuts already announced in his last Autumn Statement.
Hunt told the House of Commons: “Because we have asked those with the broadest shoulders to pay a bit more, today I go further. From April 6 employee national insurance will be cut by another 2p from 10 per cent to 8 per cent.
“And self-employed national insurance will be cut from 8 per cent to 6 per cent. It means an additional £450 a year for the average employee or £350 for a person who is self-employed.
“Combined with our autumn changes, it means 27mn employees will get an average tax cut of £900 a year and 2mn self-employed will get a tax cut averaging £650.
