Chancellor Rachel Reeves is set to announce a series of measures aimed at alleviating the cost of living crisis and the economic fallout from the Iran war, including cuts to import tariffs on more than 100 products and free bus travel for children in England during the August school holidays.
Tariff Cuts to Lower Food Costs
The government will slash import tariffs on staples such as biscuits, chocolate, and baked beans, a move expected to save consumers a combined £150 million per year. The policy targets over 100 product categories, aiming to reduce household food bills amid rising inflation.
Great British Summer Savings Scheme
Reeves will also launch the "Great British Summer Savings" scheme, offering free bus travel for children aged five to 15 on participating local routes in England throughout August. The government is committing more than £100 million to fund the initiative and support bus services facing increased costs.
"My number one priority is protecting households from rising costs," the chancellor said. "This summer I want every family to be able to enjoy themselves, that’s why we’re launching the Great British Summer Savings Scheme, and why we’re helping kids with free bus travel throughout August."
No Immediate Energy Bill Relief
Despite speculation, the government is not expected to announce immediate help with rising energy bills. Suggestions of capping supermarket food prices were met with opposition from the industry and Bank of England Governor Andrew Bailey, who described such measures as "unsustainable."
Bank of England Comments on Interest Rates
Bailey told MPs that UK interest rates might have been cut twice this year were it not for the Iran war, which has been the "dominating change in the landscape" for the economy. He noted that inflation may have fallen to its 2% target last month, but the energy shock continues to keep costs high.
Public Opinion on Sanctions and Price Caps
New YouGov polling reveals that 49% of Britons oppose loosening sanctions on Russian oil, while 19% support it. However, when asked about priorities, more Britons favour keeping fuel prices down (42%) over maintaining strong sanctions (32%). Commentators have criticised the government's approach, with some labelling price caps as "Soviet-style" and warning they could lead to unsustainable business practices.
Trade Deal with Gulf States
In a separate development, the UK has become the first G7 country to strike a free trade deal with the six Gulf states, worth £3.7 billion annually. This agreement is expected to boost trade and investment ties.
The package of measures comes as the government faces pressure to address the economic impact of the Iran war, which has disrupted energy markets and contributed to higher living costs.
