Fuel duty is being cut by 5p per litre and the Chancellor has promised to lift the national insurance threshold and cut income tax.

All eyes were on the Rishi Sunak as he announced his Spring statement with cash-strapped families across York watching to see whether his measures would help ease the cost of living.

Inflation hit 6.2 per cent in February - the highest in three years.

The fuel duty cut comes into force from 6pm today and will last until next March, Mr Sunak confirmed.

He said it was the biggest cut to fuel duty rates ever.

Motorists have been hit by record pump prices after an increase in the cost of oil following Russia's invasion of Ukraine led to supply fears.

Figures from data firm Experian Catalist show the average cost of a litre of petrol at UK forecourts on Tuesday was 167.3p, while diesel was 179.7p.

This is an increase of 18.0p per litre for petrol and 27.0p for diesel over the past month.

Fuel duty has been frozen at 57.95p per litre for petrol and diesel since March 2011.

Setting out his economic plans, Mr Sunak announced a fresh package of measures to tackle the cost of living crisis while trying to fix the public finances.

With rising energy costs, Mr Sunak said energy efficiencies will be making a big difference to bills and the government was now able to cut VAT to zero on energy saving devices, such as solar panels.

"For the next five years, home owners having materials like solar panels and heat pumps, will no longer pay five per cent VAT - they will pay zero."

He added, this could cut the cost of having a solar panel installed by £1,000.

The Office for Budget Responsibility estimates inflation will average 7.4% this year - putting a bigger squeeze on families.

The Chancellor said the threshold for paying national insurance will increase by £3,000 from July.

He also announced he is publishing a new tax plan, which will help families with the cost of living, create the conditions for higher growth, and share the proceeds of growth fairly.

He insisted the health and care levy will stay, but added: “A long-term funding solution for the NHS and social care is not incompatible with reducing taxes on working families.

“Our current plan is to increase the NICs threshold this year by £300, I’m not going to do that – I’m going to increase it by the full £3,000, delivering our promise to fully equalise the NICs and income tax thresholds.

“And not incrementally over many years, but in one go, this year. From this July, people will be able to earn £12,570 a year without paying a single penny of income tax or national insurance.

“That is a £6 billion tax cut for 30 million people across the UK. A tax cut for employees worth over £330 a year. The largest increase in a basic rate threshold ever. And the largest single personal tax cut in a decade.”

For business, he said he could cut tax rates on business investment in the autumn when he will decide whether to make the R&D expenditure credit more generous.

Meanwhile, the business rates discount coming into effect next month for retail, hospitality and leisure businesses will save them up to £110,000.

He said a typical pub will save £5,000.

Mr Sunak said he will cut the basic rate of income tax from 20p in the pound to 19 before the end of the current Parliament, in 2024.

There is help for businesses too, with the Chancellor acting to support small firms reduce their tax bills and make it cheaper to employ staff.

He told MPs: “From April, the employment allowance will increase to £5,000. That’s a new tax cut worth up to £1,000 for half a million small businesses – starting in just two weeks’ time.”

Mr Sunak also said that by the end of this parliament, in 2024, the basic rate of income tax would be cut from 20p in the pound to 19p.

Shadow chancellor Rachel Reeves said the Government’s plan did nothing for people on the edge of fuel poverty or for pensioners who are facing a “real-terms cut” to their income.