Jeremy Hunt warns against fuelling inflation after downplaying income tax cuts

Although some Conservative backbenchers are eager for measures that would be quickly felt by households, the chancellor on Sunday sought to emphasise the need to promote growth and indicated that tax cuts were “not going to happen overnight”.

The controversial prospect of announcing an inheritance tax cut on Wednesday that could spark a rebellion among Tory backbenchers defending marginal seats in less well-off areas is still on the table.

Hunt’s fellow cabinet minister, Michael Gove, also made an explicit call last month for an income tax cut before the next general election.

“Cutting inheritance tax in the middle of a massive cost of living crisis and when public services are on their knees is not the right priority,” shadow chancellor, Rachel Reeves, told the BBC.

Hunt does have some extra fiscal headroom after higher-than-expected receipts from VAT and income tax and could be expected to draw on tighter welfare spending and greater public service “productivity”.

Torsten Bell, chief executive of the Resolution Foundation, said that the “big picture” that Hunt was operating in was that taxes were already up significantly in historic terms, suggesting that any cuts would probably be quite small.