Chancellor Jeremy Hunt has warned that it is “unlikely” there will be room for any “significant” tax cuts in the upcoming Budget, despite pressure from Conservative MPs to stimulate the economy. Instead, he argued that the best tax cut for the British people is to halve inflation, as it preserves the value of wages and household budgets.
Government borrowing reached a record £27.4bn in December, the highest for that month since 1993, driven by energy support costs and higher interest payments on debt. Inflation, though easing slightly to 10.5%, remains near a 40-year high. Hunt reiterated the government’s pledge to halve inflation by the end of the year.
In a speech outlining his growth strategy, Hunt focused on four pillars: enterprise, education, employment, and “everywhere” – meaning all parts of the UK. However, business groups criticised the lack of concrete measures. The Institute of Directors called for a fifth “E” for “empty”, while the TUC warned that public sector pay restraint could mean further cuts.
Small business representatives welcomed the themes but stressed the need for detail. Brian Palmer, founder of robotics firm Tharsus, said firms require a clear long-term plan to invest with confidence. The car industry also highlighted challenges, with UK car production falling to its lowest level in decades.
