Jeremy Hunt risks fresh Tory anger by warning he won’t be ‘pumping extra money into people’s pockets’ to once again dampen hopes of tax cuts amid ‘sticky’ inflation
Jeremy Hunt has risked fresh Tory anger by once again cooling hopes of imminent tax cuts.
The Chancellor admitted inflation had been ‘stickier’ than first forecast, which meant he could not yet ‘pump extra money into people’s pockets’.
His comments are likely to cause fresh angst among Conservative MPs eager to see the Government begin to reduce taxes ahead of the general election.
Some have warned the current tax burden on businesses and households is holding back economic growth.
But, ahead of his Autumn Statement on 22 November, Mr Hunt gave little indication that he would would soon act to cut levies.
He told Bloomberg: ‘Since the spring Budget, when the last numbers were published, we’ve seen inflation stickier than was forecast at the time and that means debt interest payments are higher.’
Jeremy Hunt admitted inflation had been ‘stickier’ than first forecast, which meant he could not yet ‘pump extra money into people’s pockets’
The headline Consumer Prices Index (CPI) rate of inflation fell to 6.8 per cent in July, down from 7.9 per cent in June – but there have been warnings if could rise again in August
Speaking on a visit to India for talks on economic co-operation, the Chancellor added: ‘Our priority is to bring down inflation.
‘And when you’re trying to bring down inflation, you have to be really careful not to pump extra money into the economy, much as you would like to, not to pump extra money into people’s pockets because that can push up prices and keep inflation higher for longer.
‘So the one thing I can absolutely say is that our focus at the Autumn Statement will be on bringing down inflation and delivering both the Prime Minister’s goal to halve inflation and the Bank of England’s target to get it down to 2 per cent.’
The headline Consumer Prices Index (CPI) rate of inflation fell to 6.8 per cent in July, down from 7.9 per cent in June.
But Andrew Bailey, the Governor of the Bank of England, recently warned inflation could rise again in August due to the impact of fuel prices.
Mr Hunt also used the Bloomberg interview to reveal a post-Brexit trade deal between the UK and India could be agreed by the end of the year.
‘We could, but I think it just depends on what happens in the next few weeks,’ he added.
‘What I would say is I sense real political momentum. I think both prime ministers would like to see if there’s a way to do a deal.’
Prime Minister Rishi Sunak, who was at the G20 summit in New Delhi over the weekend, has been invited to return to the country, something which has fuelled speculation about an imminent trade deal.
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