Chancellor Rishi Sunak is exopected to hail a "new age of optimism" in his Budget today, amid predictions he will have more money than expected to spend due to a fast bounce-back from Covid.

The Chancellor is set to strike an upbeat tone as he talks up building a "stronger economy of the future", with the promise of rising wages, cash for the NHS and investment into regional transport projects.

Mr Sunak's spending plans are likely to be bolstered by forecasts of faster growth than predicted in the spring as the economy roars back into life since the lifting of coronavirus restrictions, according to analysts.

The Office for Budget Responsibility (OBR), the independent body whose forecasts guide Budget spending, is expected to up its growth outlook for 2021, cut its unemployment prediction and pencil in lower borrowing thanks to higher tax receipts.

What will be contained in the Budget has been heavily briefed in recent days.

The Government has already confirmed that Mr Sunak will announce a rise of the so-called "national living wage" to £9.50 from April - up more than 6 per cent, increasing by 59p per hour for those aged 23 and over - and the end of the year-long pay freeze he imposed on public sector workers.

However, ministers have so far refused to say whether the increase for state employees such as teachers, nurses and police officers will be a real-terms rise by being higher than inflation, with the consumer price inflation rate currently standing at 3.1 per cent.

Any rising wages will also come against a backdrop of household income pressures caused by a cost of living crunch and recent Government decisions.

National Insurance Contributions for workers are being increased by 1.25 percentage points from April to help pay for the NHS and social care, while Mr Sunak ended the £20-a-week Universal Credit coronavirus uplift earlier this month.

Mr Sunak is also expected to confirm today a further £5.9 billion in capital funding to help the NHS clear the backlog created by Covid-19.

The Treasury has pledged green investment and policies to take advantage of post-Brexit freedoms and has touted nearly £7 billion of new funding to overhaul local transport.

Mr Sunak could also raise revenues to address national debt, but the Treasury is understood to have all but confirmed to MPs that he will not do this by raising fuel duty.

However, reports have suggested that VAT on household energy bills will not be cut to help families struggling with soaring prices.