Rishi Sunak has raised the national insurance threshold by £3,000 and announced a cut in fuel duty tax by 5p a litre in an attempt to ease the burden of the cost of living crisis.

The national insurance threshold has now been raised to £12,570.

Unveiling his spring statement in the Commons, the chancellor said the cut in fuel duty of 5p a litre will be in place for a year as petrol costs continue to rise.

On Tuesday, the average cost of a litre of petrol at UK forecourts was 167.3p, the latest figures from data firm Experian Catalist show – another record high after multiple days of new peaks.

For diesel, the average cost was 179.9p.

Mr Sunak also announced that he is increasing the rate at which workers start paying national insurance to ease the burden on the low paid.

The chancellor said that the national insurance threshold has been raised by £3,000.

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On Tuesday night, ahead of his spring statement, Mr Sunak pledged to “stand by” hardworking families and set out further plans to support people with the rising cost of living.

He said he would unveil proposals intended to build “a stronger, more secure economy” as people across the UK face growing household bills which have been exacerbated by the war in Ukraine.

As a result of the invasion, the Bank of England now thinks inflation will top 8% in April and go even higher in the autumn.