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Osborne promises 'biggest tax cuts in a generation'

Chancellor of the Exchequer George Osborne during his visit to the National Graphene Insitute in Castleford, Manchester. Credit: Lynne Cameron/PA Wire

British workers and businesses will this week benefit from biggest tax cuts in a generation, George Osborne will claim.

Measures including the rise in the income tax personal allowance to £10,000 and cuts in business taxes will be brought in over the coming days.

Tomorrow the corporation tax rate will be cut by 1% to 21% and reforms to business rates will be introduced. The annual investment allowance for firms will be doubled to £500,000.

The £10,000 income tax personal allowance comes into effect on Sunday, along with the employment allowance which cuts employers' National Insurance contributions by up to £2,000.

Giving a speech in Essex later today, Mr Osborne will say that Sunday will be "the culmination of this week that sees the biggest reduction of business and personal tax in two decades".

Inflation figures bring good news for the Government

Inflation matching wage rises in the private sector brought more good news for George Osborne and the Conservative party today, but less good news for Labour, as the figures could go some way to weaken their argument on the cost of living crisis they say ordinary people continue to endure.

Read: Record low inflation figures set the stage for living standards to improve

ITV News Political Editor Tom Bradby reports on what the figures mean for political parties:

More: Falling inflation could change the debate on the economy

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Cameron: Low inflation helps standard of living

Prime Minister David Cameron welcomed today's inflation figures, saying that they are proof the government's long-term economic plan is working.

Read: Inflation data 'evidence Government's plan is working'

Speaking from Hull, Mr Cameron said the figures show that the recovery is gathering pace and the rate of inflation is helping people live a "better standard of life".

Read more: Falling inflation could change the debate on the economy

Inflation data 'evidence Government's plan is working'

Speaking during a trip to Tata Steel in Port Talbot, Wales, Chancellor George Osborne said today's figures showing that inflation had dropped to a four-year low was "further evidence that the Government's longterm economic plan is working."

Read: How falling inflation and rising wages could change the political debate over the economy

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House prices jump 6.8% compared with last year

House prices increased by 6.8% in January 2014 compared with a year earlier, according to the latest figures from the Office for National Statistics .

The ONS said prices grew by 7.1% in England, 6.9% in Wales, 1.4% in Scotland and 2.7% in Northern Ireland.

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#House prices rose 7.6% for first time buyers & 6.5% for existing owners http://t.co/SQIfl9mzWz #inflation

In January 2014, prices paid by first-time buyers were 7.6% higher on average than in January 2013.

For existing owners, prices increased by 6.5% for the same period.

Labour: Workers are still £1.6k a year worse off

Responding to today’s inflation figures, Labour welcomed the rise but said that prices are still rising faster than wages.

This fall in the inflation rate is welcome, but the squeeze continues as prices are still rising faster than wages.

Working people facing this cost-of-living crisis are on average £1,600 a year worse off since David Cameron came to office.

– Catherine McKinnell, Labour’s Shadow Treasury Minister

Read: Falling inflation: The key points

Falling inflation: The key points

  • The largest contribution to the rate fall came from lower petrol prices, utility bills and clothing and footwear
  • Furniture and household goods became more expensive
  • Books were 6.6% dearer on the year
  • Tablet computers and printers were more expensive
  • Inflation in food and non-alcoholic drinks fell to 1.8%
  • CPIH - a new measure of inflation - fell to 1.6%, down from 1.8% in January
  • RPIJ fell to 2%, down from 2.1% in January.

More: Inflation falls to four-year low

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