The Office for Budget Responsibility (OBR) thinks prices will peak at 8.7% in Q4 this year, a 40-year high, before retreating around the middle of 2023.

Higher inflation is expected to squeeze incomes and sap growth. Real incomes are projected to fall some 2.2% in 2022/23, according to the OBR – the biggest single-year fall in living standards since 1956. Gross domestic product (GDP) is meanwhile set to rise 3.8% over the coming year; that’s by no means glacial, but a far cry from the 6% forecast last October.

It’s not all doom and gloom. The OBR expects business investment to grow rapidly – at a healthy 10% clip this year. The unemployment rate is forecast to dip to 3.9% in Q1 2022, a whole percentage point lower than had been expected in October and a return to pre-pandemic lows.

The plus point for businesses – especially those in the retail and hospitality sectors – is that the increased NICs threshold might help them lure back a few workers who have left, or at the very least delay the departure of some

Still, uncertainty clouds the outlook. The impact of the invasion of Ukraine – especially at the fuel pump – hasn’t been fully factored into the forecast. Labour markets remain tight, which could put more upward pressure on prices. Any steeping of inflation, and therefore interest rates, could pose a threat to public finances and business sentiment.

It was against that backdrop that the Chancellor’s Spring Statement was set, and it included some welcome measures for businesses.

As broadly expected, the government announced a fuel duty cut of 5p a litre, which will start immediately and last until 23 March 2023.

This follows similar moves by other national governments in recent weeks, including France and Ireland, and will certainly be welcome news for households and businesses that have seen prices jump by some 25p per litre over the past month.

In the run-up to the Spring Statement, there had been calls from all sides for the Chancellor to delay the rise in National insurance contributions (NIC) announced last autumn. Alas, there was no such U-turn. Instead, we got a substantial rise (£2,690) in the threshold for NICs, which will now kick in at the same level as income tax.

The plus point for businesses – especially those in the retail and hospitality sectors – is that the increased NICs threshold might help them lure back a few workers who have left over the past two years, or at the very least delay the departure of some, helping fill the record level of vacancies.

Other changes to NICs will help. The employment allowance is being raised from £4,000 to £5,000, which will take some 50,000 businesses out of paying NICs and the health and social care levy altogether.

Businesses and households looking to make investments in renewable energy or energy efficiency were treated to new incentives. There will be no business rates due on a range of green technologies used to decarbonise buildings, including solar panels and batteries.

Homeowners making energy-saving additions to their properties will also be able to do so more cheaply, with the removal of VAT on solar panels, heat pumps, wind, and water turbines (having previously been charged at 5%).

Both measures could provide a small uplift for energy equipment manufacturers at a time when conventional power prices are at record highs.

There’s rarely a Budget or Spring Statement that goes by without reference to the UK’s age-old problem of under-investment: private investment in the US is around one quarter higher today than it was in 2016, but in the UK, it’s remained virtually unchanged.

To that end, the Chancellor previewed plans to be set out in the autumn that will help businesses invest more in productivity-boosting activities, including R&D tax-relief reforms that deliver better value for money and cover a wider range of areas including data, cloud computing, and pure maths.