Are businesses getting any help with energy bills?published at 16:17 Greenwich Mean Time 15 March 2023

16:17 GMT 15 March 2023

Simon Read
Personal finance reporter

Michael wants to know if there's any further support for businesses with the cost of energy? He says all the talk he's seen is about households, which is great, but will business support be extended for the same period?

The Chancellor failed to mention business energy bills at all during his Budget speech.

Unless he announces something in the next few days, that means businesses will see their energy bills soar from the start of April when the current support package - the Energy Bill Relief Scheme - comes to an end.

It will be replaced with the more frugal Energy Bills Discount Scheme, which will give firms a discount, but mean bills will soar.

The British Chambers of Commerce said almost half of businesses would struggle with energy bills as a result while the Federation of Small Businesses has predicted that more than 350,000 small businesses, which signed fixed tariffs last year, could need to shrink, restructure or close if their bills revert to the higher rates in April.

Jonah Fisher
Climate/Environment correspondent

The chancellor promised £20bn over the next 20 years to fund carbon capture projects.

So what is carbon capture? Well it’s a largely untested technology that sees the greenhouse gas CO2 from power stations and factories captured. It’s then pumped along pipes and stored underground, so it doesn’t contribute to global warming.

Carbon capture: What is it and how does it fight climate change?

The government has committed to de-carbonising the UK’s electricity grid by 2035 so carbon capture is being seen as an important - if expensive - option to back up renewable energy like wind and solar.

Projects in development include carbon capture hydrogen production and gas power stations.

While those involved will be reassured by the chancellor’s promises it’s not yet the green light for individual projects. It comes amid mounting concern that the UK is falling behind in the “net zero race” with investors now seeing the US as the best place to invest in green technology.

Why are my groceries still so expensive?published at 16:08 Greenwich Mean Time 15 March 2023

16:08 GMT 15 March 2023

Simon Read
Personal finance reporter

My first question comes from Birmingham resident Mary Westwood. She asks: Will food prices ever go back to what they were before this cost of living crisis?

The price you pay for food at your local supermarket is governed by a number of things, chiefly the cost and supply of raw materials.

Costs for food producers have rocketed since the beginning of the Ukraine war which led to major disruption of grain, oil and fertiliser supplies. There seems little sign of that changing any time soon.

Food and drink prices were also affected by weaknesses in the pound, which made imported products and ingredients more expensive.

As a result, food prices have climbed around 17% in the past year. That rate of increase is set to fall.

Today the Office for Budget Responsibility (OBR) predicted UK inflation will fall to 2.9% by the end of 2023 - last November, it predicted that the average inflation rate for 2023 would be 7.4%.

That doesn’t mean that prices will go down, just that they won’t increase by as much. In short we look set to have to accept higher grocery bills for the foreseeable future.

Why has the personal allowance not changed?published at 16:05 Greenwich Mean Time 15 March 2023

16:05 GMT 15 March 2023

Myron Jobson
Senior personal finance analyst, Interactive Investor

The first question I've been sent comes from Robin Cook, 85, from Newark-on-Trent. He asks why the personal allowance of £12,570 - the amount a person can earn before they pay tax - has remained unchanged in light of inflation?

It is a good and fair question, Robin. It is no secret that public finances aren’t in the best of shape following the government’s colossal spend on Covid and latterly cost-of-living support measures.

The government is looking to balance the books, and an effective way of doing so is by upping its takings from income tax which is the single biggest source of income for the Treasury.

Instead of changing the income tax rates, the government has chosen not to raise the personal allowance in line with earnings or inflation. This means we’ll all pay more in tax - but in a less obvious way.

You might have heard this referred to as "fiscal drag". It creates a situation where workers pay more taxes and have less purchasing power, even when earning more.

Personal Allowance and Income tax thresholds are frozen until 2028 at present. As our earnings grow, the longer the freezes remain in place, the more the effect is magnified.

Your Questions Answered is starting nowpublished at 16:03 Greenwich Mean Time 15 March 2023

16:03 GMT 15 March 2023

We're turning our attention to your questions now.

Our experts Simon Read, Kevin Peachey and Myron Jobson are in place for the next hour or so, ready to tackle the things that are puzzling you, our audience.

Stay with us.

Heather Sharp
Live reporter

I'm taking over editing the page as the afternoon moves on. We've already brought you the chancellor's hour-long speech, with an expansion of free childcare, more help with energy bills and the scrapping of the lifetime allowance on pension contributions, as well as a raft of other changes. You can read the key things here.

We've just been hearing that the Office for Budget Responsibility predicts the UK will avoid a recession, but only just - and we're in the middle of what it expects to be the largest two-year fall in living standards since the 1950s.

We'll continue to chew over what all this means for our wallets and the wider economy, including hearing from personal finance expert Martin Lewis who has been speaking on Radio 5 Live.

Also, you've been sending us loads of really interesting questions, and from 4pm we'll be putting them to Simon Read, the BBC's personal finance reporter, and Myron Jobson, a senior personal finance analyst at Interactive Investor. Stay with us.

Jennifer Meierhans
BBC Business reporter

Image source, Hamlet Shanley

We've been getting reaction from young people on what the budget means for them.

Hamlet Shanley, 26, says the only part of the budget that affected him was the Energy Price Guarantee continuing until June.

“That means my bills aren’t going up but they aren’t coming down either,” says Hamlet from Portsmouth.

“I’m glad that they are bringing the price of energy on pre-payment meters in line with direct debits because my mum is on a pre-payment meter,” he added.

Hamlet and his partner currently rent but would like to be able to buy their own home.

He was hoping the chancellor would the raise tax-free allowance, especially for under-30s.

But he felt the budget was “about what wasn’t said rather than what was”.

Overall he says he felt the budget was “a lot of measures designed to stem the current crisis and prevent it from getting worse rather than making things any better.”

He said the expansion of free childcare would be welcomed by some of his friends and he felt investment in nuclear was “a step in the right direction to improving our energy security".

A little bit more from the OBR - which says that since the Brexit vote in 2016, business investment growth in the UK has "stalled".

In its report, the independent forecaster says: "Business investment has stagnated in real terms for much of the period since 2016, such that on the eve of the pandemic it stood 16.2% below our pre-referendum expectations.

"More recently, the pandemic and the increase in global energy prices have also weighed on investment. But in the face of these global shocks, UK... investment has continued to underperform relative to other G7 countries."

The Budget has set out policies designed to help boost the economy - such as extending free childcare - and to relieve some of the burden on cash-strapped households.

However, in terms of our living standards, things still look pretty bleak according to the OBR.

Over the next two years, living standards will see the biggest decline in around 70 years.

You can see the drop marked on the graph as the line dips down over 2022 and 2023, before increasing again up to and beyond 2025.

Jennifer Meierhans
BBC business reporter

More from the government's independent forecaster now on what impact today's budget is going to have on the UK economy in the coming years.

The Office for Budget Responsibility is predicting that house prices will fall by 10% from their high in the last three months of 2022.

And property transactions are expected to drop by 20% from their peak at the end of last year too.

It says indicators from Halifax and Nationwide suggest that house prices have already fallen by 3 to 6% between their peak in the middle of 2022 and February 2023.

The OBR thinks low consumer confidence, the squeeze on real incomes and the expectation of mortgage rate rises to come will contribute to house prices continuing to fall and fewer of them being bought and sold.

We're still hearing from Richard Hughes of the Office for Budget Responsibility.The OBR reckons that the expansion of free childcare Jeremy Hunt has announced "has by far the largest impact on potential output in this Budget".

It calculates that the government plan to expand 30 hours of free childcare per week for youngsters aged between nine months and two years old will gradually add 60,000 people to the workforce.

In its report, the OBR believes that by 2027-28, these people will be working on average around 16 hours a week - so basically working part-time.

What does the Budget mean for the devolved nations?published at 15:05 Greenwich Mean Time 15 March 2023

15:05 GMT 15 March 2023

Douglas Fraser
Scotland business & economy editor

More funds are heading for Holyrood, Cardiff Bay and Stormont as a result of decisions announced in the Budget at Westminster today. The Scottish government is to get £320m more next financial year, £180m goes to Wales and £130m to Northern Ireland.

This is a proportionate share of funds, set out by the Barnett Formula – agreed some 45 years ago – will go to devolved administrations for ministers there to decide how funds are spent.

These funds come with some political pressure to match such an initiative in England – if Westminster can do it for the English, why not for Scotland and Wales?

English politics is less concerned about keeping up with its smaller neighbours, but the newer, smaller administrations don’t want to look like they’re less generous with public service provision.

It will be up to MSPs to decide how these funds are used in Scotland. There has been some discussion of similar moves to extend childcare to one and two year olds within the SNP leadership campaign.

Jennifer Meierhans
BBC business reporter

Richard Hughes, chairman of the Office for Budget Responsibility, is now talking us through the key messages in its economic forecast for the UK given today's budget. He says:

• Inflation will hover around 0% in the middle of the decade and won't return to 2% until 2028
• Interest rates will peak at 4.3% later this year before falling back to 3%
• Real household disposal income per person will fall by 6% this financial year and next
• "But that would still represent the largest two-year fall in living standards since records began in the 1950s," he says
• "We think households are going to dip into some of their savings to help manage the squeeze on living standards and that supports growth in the near term," he adds.

Vanessa Clarke
Education reporter

Image source, Gemma Rolstone

Gemma Rolstone from Puffins Childcare in Exeter, who runs five nurseries, says today’s announcement isn’t about early years education, it’s about childcare.

“The children are not being put at the centre of this” she explained.

She was hoping to see help with business rates and a much larger increase to the current funded rates.

“We need to get what we have at the moment right and also more investment in our staff, in recruitment and training. I was not expecting the expansion on funded hours, that is a curve ball."

She said it could end up being more expensive for parents and that she can’t believe there was no consultation about expanding free hours to under 3s.

She will not be introducing the increased ratios and says a lot of her staff would leave the sector if she did.

“When you talk about a ratio of 1 to 5, you are talking about a ratio of 1 to 9 if a two-year-old’s nappy is being changed".

“The idea has come from Scotland where they have better paid staff and more qualified staff, you can’t cherry pick one part of the system and apply it somewhere else” she added.

Jemma Dempsey
BBC business reporter

We've also been getting reaction to the budget from Paul Johnson, the director of the Institute for Fiscal Studies, who thinks the measures announced on childcare and pensions might not make that much difference.

He says it's not sensible to change the entire tax system in order to sort out a problem with how the way the NHS pension scheme works.

"That said there’s quite a lot to be said for giving people more flexibility to save for retirement but there’s all sorts of things that ought to have been done at the same time. There are some seriously excessively bits of support through the pension system that weren’t addressed."

Jeremy Hunt has just used his Budget to announce plans to boost the UK workforce.

However, the Office for Budget Responsibility isn't sure how effective they will be.

We're about to hear from the Office for Budget Responsibility (OBR) and its predictions of how the UK economy will fare now that we've heard Chancellor Jeremy Hunt's plans.

The OBR is an independent forecaster and prior to any major Treasury announcement, it gets a look at the government's tax and spending plans. It then predicts how the country will perform over the next five years.

Here's what we know so far:

• The UK will avoid recession But only just. The economy is set to shrink by 0.2% this year but it will escape the usual definition of a recession, where growth contracts for two three-month periods in a row.

• Inflation will shrink The rate at which prices rise will more than halve to 2.9% by the end of 2023. That compares to the current inflation rate of 10.1%
• Debt as a share of GDP will fall This is a key aim for the government which wants to see its underlying debt decline by the end of a five year period

We will bring you updates once the OBR chair Richard Hughes begins speaking at 2:30pm.

Some reaction from the SNP to the Budget now, and SNP spokesman Stewart Hosie says the UK economy has gone from the most robust in the G7 to one of the weakest.

Brexit has slammed the brake on investment and growth, he says, and set up trade barriers with the UK's nearest neighbours.

He says the UK is the only economy in the G7 that has not returned to its pre-pandemic level, while real household disposable income remains below its 2019/20 level and will continue to do so for the next four or five years.

The Budget needed, Hosie argues, to tackle long-term problems with productivity, the supply of labour and skills, and green energy, as well as the cost burdens on ordinary people - but failed to address these properly. Only reversing Brexit can resolve this, he says.

Hosie adds that Scotland - under the SNP - is doing better on both employment and unemployment than the UK.

Some will still pay more for energypublished at 14:30 Greenwich Mean Time 15 March 2023

14:30 GMT 15 March 2023

Kevin Peachey
Cost of living correspondent

The chancellor has confirmed that four million prepayment meter customers will no longer pay more per unit of gas and electricity than those who pay via direct debit.

Previously, the cost was higher owing to the higher fixed costs involved. Ultimately, the cost of this change may be shared across everyone’s bills.

However, this is not the end of differential pricing.

If you pay quarterly, by cash or cheque – and many older people do – then you are still likely to pay more than others for your domestic energy.

A fall in inflation does not mean a fall in pricespublished at 14:29 Greenwich Mean Time 15 March 2023

14:29 GMT 15 March 2023

Sean Farrington
Presenter, Today programme business and Wake up to Money

It feels like most mornings I have a boss, a shopper or a worker reminding me that a fall in inflation does not mean a fall in prices.

Long before inflation hit its highs of 10% and more, bosses of furniture manufacturers, builders, toy shops were telling me of the highers costs they were seeing and were eventually going to have to pass on to customers - which we’ve now seen.

Not many are telling me yet that their prices rises are going to be coming to an end.

It will be a huge relief if they don’t see this year what they saw last year, but these predictions of inflation at 2.9% by the end of 2023 still means things will be even more expensive than they were in 2022.