hancellor Jeremy Hunt has dealt Conservatives agitating for tax cuts a blow, saying they will be “virtually impossible” as he has to make some “frankly very difficult decisions”.
He insisted on Thursday that he had to push on with stringent measures to bring down inflation despite some suggesting a less gloomy picture was providing the space to reduce taxes.
Conservative former prime minister Liz Truss is among those on the Tory right calling for the Government to make the move ahead of the Chancellor’s autumn statement on November 22.
The Bank of England’s holding of interest rates for the first time in almost two years, leaving them unchanged at 5.25% on Thursday, meant no adding to the cost of national borrowing.
A surprise fall in inflation to 6.7% in August and Government borrowing coming in lower than official forecasts that month had also raised some hopes.
But Mr Hunt said there was no “extra headroom” to cut taxes as he prioritises Prime Minister Rishi Sunak’s pledge to halve inflation this year, to a level of around 5.3%.
“I really, really wish it was true but unfortunately, it just isn’t,” he told LBC’s Tonight With Andrew Marr.
If we do want those long-term debt costs to come down, then we need to really stick to this plan to get inflation down, get interest rates down
“If you look at what we are having to pay for our long-term debt, it is higher now than it was at the Spring Budget.
“I wish it wasn’t, it makes life extremely difficult, it makes tax cuts virtually impossible, and it means that I will have another set of frankly very difficult decisions.
“All I would say is, if we do want those long-term debt costs to come down, then we need to really stick to this plan to get inflation down, get interest rates down.
“I don’t know when that’s going to happen. But I don’t think it’s going to happen before the autumn statement on November 22, alas.”