As we reported earlier, inflation has today hit a 30-year high in the UK. In the 12 months to February, prices rose by 6.2% on average.

But what is inflation and how will it affect you?

Inflation is the rate at which prices rise. If the price of a loaf of bread is £1 and it rises by 5p, then bread inflation is 5%.

Right now, prices are rising so quickly that average pay is not keeping up.

And the Bank of England has warned inflation could hit double digits this year if rising energy prices push up the energy price cap further.

Prices are now rising at their fastest rate for 30 years.

Read more: Inflation explained

Inflation: The worst is yet to comepublished at 10:45 Greenwich Mean Time 23 March 2022

10:45 GMT 23 March 2022

Faisal Islam
BBC Economics Editor

The chancellor would not have been shocked by the 6.2% 30-year high in inflation announced just hours before his statement.

But it illustrates that he has an “index problem”.

The rise creates immediate problems for him in terms of pensions and benefits, which are set to go up by half that amount, 3.1%, next month. They are simply not being increased in line with rising prices.

But the big problem is that this is barely reflecting the further impact of Russia’s invasion of Ukraine.

This February inflation number covers only half a week of that conflict. And inflation is set to go even higher by the end of the year. That was the Bank of England’s view, likely to be confirmed today in an official forecast from the government’s independent forecaster the Office for Budget Responsibility.

This raises the prospect of some bumper price rises next year in line with inflation in the autumn.

Ahead of the Spring Statement, we've been talking to people about where they're feeling the pinch and what they want the chancellor to do about it.

Rhona Metcalfe owns a guest house in Blair Atholl, Perthshire.

She says her electricity bill has doubled from £120 per month to £240. She also uses oil for heating and tells us it was 52p per litre a month ago, two weeks ago it was 96p per litre and last week it was £1.25.

Rhona says the rise in energy prices “means our liabilities go up significantly…you try and buy locally but you can’t do that with everything, and our suppliers have put their prices up".

She says it’s fuel that’s the biggest problem, adding that she can’t see the government doing anything about energy “because it’s a global issue”, but says it would be interesting to see if they can help with the other costs by cutting taxes on fuel or National Insurance.

“Any money that comes out of people’s wages will impact what people spend their money on,” she says.

“We need people to go on holiday, that’s what pays our costs at the end of the day, and unfortunately, we’re still paying for the cost of borrowing from Covid, so it’s a perfect storm.”

Image source, UK Pool

Chancellor Rishi Sunak has left his home in Downing Street to make the short journey across Westminster to the House of Commons, where he will deliver his Spring Statement at 12.30 GMT.

Since this is not a full Budget, there was no photo-shoot with the famous red box.

Instead, he got into his ministerial car with carrying his statement speech.

Sunak's message reflects reluctance to splurgepublished at 10:22 Greenwich Mean Time 23 March 2022

10:22 GMT 23 March 2022

Laura Kuenssberg
Political editor

For Rishi Sunak, Wednesday's speech is a continuation of a path he set out in the autumn Budget.

He talked then, in what was an echo of Margaret Thatcher, about the limitations of government, saying: "There's a reason we talk about the importance of family, community, and personal responsibility.

"Not because these are an alternative to the market or the state… it's because they are more important than the market or the state.

"The moments that make life worth living aren't created by government, aren't announced by government, aren't granted by government."

It was a message to his party that despite presiding over months of mammoth spending during the pandemic, he was reluctant to splurge.

It was a message to his next door neighbour in Downing Street too, that No 11 wouldn't release the purse strings to pay for all of No 10's political desires.

And it was a message to the country that the government's money man was serious about trying to get the books under control.

Read more from Laura here.

Image source, UK Parliament

While a lot of the focus has been on what Tory MPs are demanding from their chancellor, the opposition parties are making their voices heard too.

For Labour, the big push is for Rishi Sunak to scrap next month's National Insurance hike.

Shadow chief secretary to the Treasury, Pat McFadden, says the chancellor has claimed to "believe" in low taxes, but has increased them "more than any chancellor in half a century".

He adds: "It is because the Conservatives are the party of low growth that they are now the party of high tax."

The SNP is also calling for the tax rise to be scrapped, dubbing Sunak "the poverty chancellor" for removing the £20 uplift for universal credit and breaking his pledge to keep the pension triple lock.

The party's spokeswoman, MP Alison Thewliss, says: "The reality is that the chancellor is not going anywhere near far enough to tackle this crisis and to support families.

"It is essential to reverse Tory cuts and tax hikes and deliver a major boost to incomes - not just tinker around the edges with minor adjustments."

Fifty Tory MPs have called on the chancellor to cut fuel duty to help motorists facing a pinch at the pumps. And there are newspaper reports Rishi Sunak could announce such a move during his Spring Statement later.

But how much would it actually save you?

According to motoring organisation the RAC, a 5p reduction in fuel duty would make it £3.30 cheaper to fill up a typical family car with a 55-litre tank.

But it would cost the Treasury around £2.5bn.

Read more about the problems with petrol and fuel duty here.

Image source, UK Parliament

Wondering what time everything is kicking off in the Commons? Here is the timetable for the day:

• 11:30 Business will begin with Wales Questions
• 12:00 Boris Johnson will take to the dispatch box for Prime Minister's Questions
• 12:30 Chancellor Rishi Sunak begins his Spring Statement
• From around 13:00 onwards Labour's Rachel Reeves responds, and MPs debate the economic update

Just a little warning though - things rarely run on time in politics, so don't be surprised if any of these timings slip a little...

Simon Jack
BBC Business Editor

Image source, Getty Images

Businesses are facing some horrendous cost pressures – energy and fuel being the most acute.

Unlike consumers, companies aren’t protected by a price cap and every steel bar that’s forged, every chip that’s fried and every fertilised foodstuff is energy hungry and needs transporting.

A cut in fuel duty would help - but an energy cap for business would be a hard thing to design.

Staff payroll costs are already rising and firms would dearly like the Chancellor to delay the rise in employers national insurance. That looks unlikely.

It is a truism in business that cash flow is king and business leaders are urging Rishi Sunak to consider using Covid-era tools – extend Covid Recovery Scheme loans to the end of 2022, extend business rate reductions and delaying VAT's planned return to 20% in April from 12.5%.

If he wants firms to invest he should extend the “super deduction” that cuts taxes for those that do. Without help firms say, businesses are horribly exposed to extreme cost pressures at a time when their customers are seeing their own incomes squeezed.

Inflation rose to a 30-year high of 6.2% in February - and one of the UK's biggest food wholesalers says the price rises are hitting its business "significantly".

Bidfood supplies more than 45,000 caterers and food services firms around the UK.

Chief executive Andrew Selley told BBC Radio 4's Today programme that food, fuel and energy were key costs for his business.

"If I look at things like fuel, year-on-year...diesel is 40% up on last year, if I look at our electricity price that's 250% up on last year and those two things together make up over 10% of our total costs.

"Obviously if I look at food...we're seeing much bigger increases on things like cooking oil, chicken, cheese, butter, nothing exotic - these are standard food staples and we're seeing much bigger increases than those at the moment, so I think that that number will increase throughout the year."

But he said if, as rumoured, Chancellor Rishi Sunak cuts fuel duty by 5p per litre in today's Spring Statement that would "help to mitigate some of those increases coming through".

Read more: February rise in food prices largest for 10 years

Fatou Taylor, a carer from Somerset, says she has considered switching jobs because of rising fuel costs.

"I used to be able to fill my car up for £36 but last week it was £56," she says. "That's a big difference.

"I need to be able to earn money to be able to run this car.

"If I don't have this car, I can't go anywhere. I can't do my job."

Fatou says she is "really passionate about care" and "enjoys the job".

But without help, she won't be able to stay on.

Don't expect a pandemic-style rescue this timepublished at 09:35 Greenwich Mean Time 23 March 2022

09:35 GMT 23 March 2022

Faisal Islam
BBC Economics Editor

Though Britain is facing a cost of living crisis, the instinct of the chancellor is that he can only do so much.

Over the weekend the Rishi Sunak warned that he cannot protect the country from all the pressures arising out of the global wave of surging prices.

There may be some further help with energy bills, or a cut in the VAT on fuel or diesel.

And he may raise the amount you can earn before you start paying national insurance.

But that would be a smaller tax increase, not a cut.

The current cost of living crisis threatens to turn into an emergency. And although this could be a new normal lasting years, don't expect a pandemic-style rescue, this time.

What to expect from the Spring Statement

Image source, PA Media

The main reason behind the cost of living crisis in the UK is the rising cost of energy.

Gas prices have risen sharply over the past year due to a worldwide squeeze on energy supplies caused by a number of factors, including:

• A cold winter in Europe in 2020 and 2021
• A relatively windless summer in 2021 (making it difficult to generate wind energy)
• Increased demand from Asia putting pressure on liquefied natural gas supplies

On top of this, wholesale prices have risen even higher following Russia's invasion of Ukraine, with Russia the world's largest natural gas exporter.

The UK is feeling the impact of these factors because about 85% of homes have gas central heating.

Around 18 million households on standard tariffs will see an average increase of £693 - from £1,277 to £1,971 per year.

Chris Oxley, who runs a plant nursery in Derby, says rising prices mean he is having to make careful decisions about his business.

"You have to think twice about what you buy and the prices of stuff," he says.

"The price of plants is going up because we import from Holland - it's horrendous."

Chris says his water rates and electric bills are going up, and it is hard to cover those costs.

"Obviously people aren't going to pay twice the price for what you sold them last year," he adds.

"You've got to put them up a little bit and hope you come through it."

Dharshini David
Economics Correspondent

Image source, Reuters

Russia and Ukraine produce a third of the world’s wheat exports, a fifth of its gas and a tenth of its oil, not to mention manufacturing materials such as palladium, nickel and aluminium.

This is what will make the economic impact of this war painful globally. As disruption and sanctions bite, prices have soared.

With a sixth of diesel coming from Russia, the cost of filling up with that fuel is nearing £100. Petrol isn’t much cheaper; Russia accounts for 10% of our crude oil.

Wholesale gas costs are around 30% higher - pointing, if sustained, at a further surge in bills come the autumn. As we wean ourselves off Russian imports, those costs could rise.

We don’t really buy wheat from either nation but record prices on global markets, along with other costs prompted warnings of price hikes from food outlets Greggs and Dominos. Many others will follow; as the Chancellor acknowledges, there are “challenging times” ahead.

Five ways the Ukraine war could push up prices

Image source, PA Media

As the chancellor runs through his speech in No 11 this morning, news broke that inflation had hit a 30-year high.

Inflation is the rate at which prices rise, so, if a bottle of milk costs £1 and that rises by 5p, then milk inflation is 5%.

Prices rose by 6.2% in the 12 months to February as fuel, energy and food costs surged.

And the Bank of England thinks it could hit double digits this year.

Read more about the news here.

Image source, Getty Images

While we won't know exactly what Rishi Sunak will announce until he gets to the dispatch box, there has been some information coming our way...

It’s understood the chancellor is considering options to ease the squeeze on budgets in the wake of rising energy costs and the war in Ukraine.

This could include:

• A cut to fuel duty to combat a record-breaking spike in prices at petrol pumps
• Increasing pensions following government suspension of the triple lock
• A boost to benefit payments
• Delaying a planned increase to National Insurance payments.

Image source, HM Treasury

The Spring Statement gives the chancellor the opportunity to set out new figures on how the UK’s economy is doing and a chance to give an update to Parliament on progress made since his budget in October.

While it may not be as hefty as the Autumn statement, there is a lot of pressure on Rishi Sunak this time round to provide answers to the cost of living crisis, where people across the country are facing rising fuel, food and energy costs.

Read more about the statement here.

Image source, PA

Welcome to Westminster, for one of the big calendar events of the year - the chancellor's Spring Statement.

Rishi Sunak will give his economic update from about 12:30 GMT.

But stay with us in the meantime for the build-up, breaking news and analysis, as well as this week's bout between Boris Johnson and Labour leader Sir Keir Starmer at Prime Minister's Questions at noon.