The chancellor told the Commons on Wednesday the “three building blocks” of his Budget were “strong public services, infrastructure innovation and skills, and support for working families”.
However, he admitted inflation, which is currently at a nine-year high, is "likely to rise further" amid supply chain woes and a surge in global energy prices.
This means the high level of inflation is set to severely hamper the salary hike workers earning minimum wage which will receive, after an increase to the National Living Wage was announced earlier this week.
What are the eight key takeaways from the chancellor's latest Budget?
1. Universal Credit taper cut
People working and claiming Universal Credit will soon take home more money, after the chancellor announced the taper rate will be reduced from 63% to 55%.
Mr Sunak said: “The Universal Credit taper withdraws support as people work more hours. The rate is currently 63%, so for every extra £1 someone earns, their Universal Credit is reduced by 63p. “Let us be in no doubt: this is a tax on work – and a high rate of tax at that.”
It will be welcome news after the £20 per week UC uplift introduced during the pandemic was removed - a move which received great backlash.
The taper change will come into effect by December 1.
2. Cheaper booze
An overhaul of the Alcohol Duty system will bring down the price of drinks like prosecco and beer.
Mr Sunak said the Duty, first introduced in 1643 to help pay for the civil war, was "outdated, complex and full of historical anomalies" and announced plans to "radically" simplify it.
"The new system will be designed around a common sense principle - the stronger the drink, the higher the rate," said Mr Sunak.
He announced the government will slash the number of main duty rates from 15 to six and will cut the “irrational” 28% duty premium on sparkling wines and duty on fruit ciders.
The planned increase in duty on spirits, wine, cider and beer will also be cancelled - a tax cut worth £3 billion.
A draught relief will apply a lower rate of duty on draught beer and cider, cutting the tax by 5% on drinks served from draught containers over 40 litres - bringing the price of a pint down by 3p.
3. Childcare and schools funding
£300 million will be allocated to "A Start for Life" schemes for families.
The projects will include "high-quality parenting programmes, tailored services to help with perinatal mental health, and funding to create a network of family hubs around the country," the chancellor said.
To improve the quality of childcare, providers will receive an extra £170 million by 2024-25.
In a bid to help the wider education recovery, almost £5 billion will be allocated to schools and colleges.
Mr Sunak promised to restore school funding per pupil to 2010 levels in real terms - the equivalent of an increase of more than £1,500 for every pupil.
Further investment will create 30,000 new school places for children with special educational needs and disabilities.
4. More cash for the NHS and social care
A Health and Social Care Levy will also increase taxes to fund both the struggling sectors.
National Insurance will rise by 1.25 percentage points from April next year - the increase in payments must be spent on health or social care.
Dividend tax will also increase by the same amount at the same time.
5. Minimum wage and public sector pay increases
The government previously confirmed that the National Living Wage will increase from £8.91 to £9.50 per hour.
On average, people earning minimum wage can expect to see an extra £1,074 a year before tax.
The freeze on public sector pay will also end on April 1 next year, paving the way for around 5.7 million people to get a pay rise.
The chancellor said public sector workers, like nurses, teachers and police officers, will see “fair and affordable pay rises” across the whole Spending Review period - within the next year.
But it is not yet clear whether workers will actually be any better off, given inflation is currently higher than 3%.
The decision on how much extra money public sector workers will get is not due to be made until next year, once the pay review bodies have made their recommendations.
6. Business rates cuts for hospitality, retail and leisure
Mr Sunak announced roughly £7 billion worth of cuts to business rates.
Next year’s planned increase in the rates multiplier will be scrapped, while there will be a 50% rates discount for businesses in the retail, hospitality, and leisure sectors.
He added there would be relief for businesses adopting solar panels and a 12-month rate holiday on property improvements.
More frequent revaluations to business rates will also be carried out every three years from 2023 to make rates fairer.
The Treasury committed to a £7.6 billion boost to fund a "local transport revolution" to improve bus, tram and train services in cities across England.
Mr Sunak said the funds would help upgrade more than 50 local roads and would be "enough to fill one million more potholes a year.”
Funding for buses, cycling and walking totals more than £5 billion.
8. Fuel duty rise scrapped
The planned rise in fuel duty will be cancelled due to pump prices being at their highest level in eight years.
It will be a popular move among motorists but it goes against green targets to reduce carbon emissions from transport - something that may not be welcomed at this week's COP26 climate change conference in Glasgow.
Mr Sunak told MPs: “I’m not prepared to add to the squeeze on families and small businesses. “So I can confirm today the planned rise in fuel duty will be cancelled. That’s a saving over the next five years of nearly £8 billion.”