The Treasury last night released a short extract from the speech Rishi Sunak will give to deliver his Spring Statement in the Commons today.

“Security” looks to be a big theme in Mr Sunak’s speech, with the chancellor promising to protect the “security for working families as we help with the cost of living.”

He will say: “We will confront this challenge to our values not just in the arms and resources we send to Ukraine but in strengthening our economy here at home. So when I talk about security, yes – I mean responding to the war in Ukraine.

“But I also mean the security of a faster growing economy. The security of more resilient public finances.

“And security for working families as we help with the cost of living.”

Sanctions against Russia could have a “catastrophic and long lasting” impact on the country but they will come at a cost to the UK, a group of MPs has warned.

A report by the Treasury Select Committee concluded that the poorest households will be hit hardest. It revealed that the UK is not protected against the economic impact of unprecedented sanctions on Russian oil and gas and that soaring prices will intensify the cost-of-living crisis for the whole country, writes Holly Williams.

The squeeze on British households’ budgets has gathered pace ahead of Rishi Sunak’s Spring Statement, which is expected to only offer minor tweaks to ease the cost-of-living crisis, Business editor Anna Isaac writes.

The measure of price growth in the economy, the Consumer Prices Index (CPI) is set top 8 per cent next month when the new energy price cap shoots up by more than 50 per cent, the Bank of England said last week. It could stay at this level for for close to three months.

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Simon Williams, spokesperson for the RAC, has said that a planned 5p cut to fuel duty would be a “drop in the ocean” and would only take prices back to what they were last week.

Speaking on Sky news Mr Williams said: “The average price of petrol is now at 167p a litre and diesel at 179p a litre – £91 to fill up an average petrol car and £97 for diesel.

“The cost-of-living crisis is being driven very much by the increase of the price at the pumps. We are calling on the chancellor today to take significant action. He’s taking about a 5p cut in duty, which I think will be a drop in the ocean. That will take us back to a price we paid this time last week.

“What use is that really, it’s something but I think he needs to go further. In fact, he might be better off cutting VAT.”

The managing director of Iceland supermarket has said that food bank users are saying no to potatoes and root vegetables because they can’t afford the energy required to boil them.

Richard Walker told Radio 4’s Today programme that the cost-of-living crisis was “the single most important domestic issue that we’re facing as a country and it is incredible concerning.”

“You now, we’re hearing about some food bank users declining potatoes and root veg because they can’t afford the energy to boil them,” Mr Walker said.

He added that business was “not an endless sponge that can soak it all up”.

Mr Walkers suggested that the energy price caps for consumers could be extended to businesses.

The sharp jump in inflation is a “complete disaster for living standards” and will mean “pay packets continuing to shrink”, a senior economist at the Resolution Foundation has said.

Jack Leslie warned of more prices rises to come, saying: “Another sharp rise inflation last month offers a foretaste of the huge income squeeze coming this year, with inflation likely to hit at least 8 per cent this spring – which could be the highest it’s been in 40 years – along with a second spike this autumn.”

He added that the prolonged period of high price rises will be a “complete disaster for living standards”, saying that “millions of people have simply never experienced [this scale of inflation] before”.

“It will mean pay packets continuing to shrink, along with vital income support such as Universal Credit and the State Pension.”

Former Shadow chancellor John McDonnell has said that people are “choosing between heating and eating”. He called on the government to increase borrowing to “protect” people in the short-term.

Speaking on Sky news, he said: “We’ve got to make sure that we are responsible in everything that we do. The responsible way forward is to recognise that in times like this there is real hardship out there.

“People are suffering. It is true that people are choosing between heating and eating, we are talking about people who have had their wages virtually frozen for nearly twelve years. It’s tough out there.

“Yes we’ve got to protect people in the short-term and that does mean an increase in borrowing in the short-term. The most important thing is you borrow to invest.”

He said that if the government invested further in green energy and insulating homes then they would reap the rewards.

Tony Danker, director general of the Confederation of British Industry, has said that Rishi Sunak needs to “shore up confidence in the economy” with his Spring Statement today.

Mr Danker warned that the economy needs to keep growing, “because if we don’t, these problems just get worse”.

He added that in the current climate “there’s a risk that confidence wavers, businesses stop investing, consumers stay at home – so inflation is hard to tackle”.

“If we don’t have tailwinds in our economy, then the headwinds overwhelm us and so the Chancellor has to double down on growth, he has to help hardest-hit households with the cost of living, he has to help lots of businesses who are dealing already with the rising energy costs – there isn’t a price cap – and he needs to encourage businesses to be confident and invest and grow.

“That’s the only way we really get through the year head.”

What announcements might Rishi Sunak make in his Spring Statement later today?

One measure Mr Sunak could unveil would be to cut fuel duty. This would arguably be one of the easiest ways to win over votes and support households with the cost of living crisis.

The chancellor is reportedly gearing up to announce a temporary cut to the duty of up to 5p per litre.

Another option Mr Sunak has would be to hold off the planned national insurance rise. This, however, would represent a major U-turn for the government. They have previously insisted that this will not happen, despite the public protests of several Tory MPs.

There is no talk of the government reducing VAT across the board, but Mr Sunak could give a helping hand to the hospitality sector.

The chancellor could also increase Universal Credit payments to put more money in the pockets of low income households.

Labour are calling on Rishi Sunak to impose a windfall tax on North Sea oil and gas companies to help with rising energy bills. Mr Sunak has already unveiled his plans to help with energy costs, however, giving a £200 loan to every family from October.

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The UK government has struck a deal with the US to partially end the tariffs on British steel and aluminium imposed by former president Donald Trump, Andy Gibbons writes.

The Department for International Trade said the US had announced “expansive removal” of section 232 tariffs, which have affected UK exporters, with the changes to take effect on June 1 2022.

In response the UK will suspend rebalancing measures on US products including whiskey, blue jeans and motorcycles, the department said.

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