In his latest of efforts to reduce the burdens inflation is causing the hardest hit middle, the Chancellor is expected to announce plans to cap increases in rail fares to 1% over inflation, down from the planned 3%. This 2% difference is expected to cost the UK significantly.
It is expected that these changes will be announced during the Autumn Statement which is scheduled for Tuesday, the day before public sector strikes are planned. It is predicted that the Chancellor will also delay or freeze the projected 3% fuel duty increase which was set to begin in January as another measure to help financially burdened workers in the UK.
It is suggested that he will also announce a package intended to help small businesses by allowing any companies with 50 or fewer employees to opt out of auto-enrolment in pensions and there is a scheme in place to provide what are being called “easing” funds for these firms as well.
Amidst all his plans, fears of a double dip recession are intensifying and the Chancellor is expected to discuss his firm belief that austerity measures should continue based on the current debt crisis in the eurozone. Sources say that the rail cap is probably going to go ahead as planned yet it is unclear whether or not Osborne will freeze the 3% fuel duty.
At the moment, inflation is well above the targeted 2% and according to the most recent CPI, it is running closer to 5%. This is putting a significant amount of pressure on the Chancellor and even businesses are concerned that consumers just won’t be spending as much because of low wage growth and much higher prices on most goods.
In the end, it is expected that the Chancellor will state that government cuts will continue as planned through 2017 so that the country can make an effort to maintain its current credit rating. These comments may add fuel to the fire on the next day’s planned public worker strikes against government cuts in pensions.