Chancellor Jeremy Hunt believes that inflation, which is currently at a staggering 10.5 percent, is still too high to make large giveaways. In order to get the economy back on track and reduce debt, he’s said to be planning a slimmed-down spring statement instead.
Ministers want to cut inflation in half this year, as it eats into the pay packets and budgets of millions of hard-working Britons. In December, inflation was 10.5 percent, down from 10.7 percent in November. The two months of decline followed a 41-year high of 11.1% in October.
However, inflation is still five times higher than the Bank of England’s target of 2%. Food prices increased by 16.8 percent in the year to December, with milk, cheese, and eggs seeing the greatest increases.
The Chancellor has told MPs that he still wants to cut taxes before the next election, which is expected in 2024, but that he may have to wait until the economy recovers.
According to a government insider: “We want low taxes and sound monetary policy. But sound money must come first because inflation erodes the pound in people’s pockets more subtly than taxes.”
Conservatives, on the other hand, are urging him to reduce the exorbitant tax burden in order to help families cope with the cost of living crisis.
Boris Johnson used a speech last week to call on ministers to demonstrate that the Conservatives are still the party of low taxes in order to regain support ahead of the next election.
And former Prime Minister Liz Truss is rallying her supporters in a new Parliamentary group to advocate for lower taxes, which she never had the chance to implement.
