British Finance Minister Jeremy Hunt has ruled out tax cuts that could exacerbate inflation, ahead of his upcoming Autumn Statement on Wednesday.
This key fiscal announcement is intended to stimulate the UK's stagnant economy and improve the Conservative Party's standing before the anticipated election next year.
Despite pressure from Conservative colleagues to lower taxes in response to the Labour Party's lead in polls, Hunt is committed to reducing taxes responsibly, without contributing to inflation. After a drop in inflation to 4.6% in October, Prime Minister Rishi Sunak is closer to his target of cutting inflation by half in 2023.
Hunt, optimistic about economic growth, is considering all possibilities, including inheritance tax adjustments, as reported by the Sunday Times. Yet abundant spending due to COVID
-19 and heightened energy prices has constrained his options, with public debt at nearly 100% of the GDP.
With the release of official forecasts this Wednesday, Hunt may have more leeway in his fiscal approach than previously. He aims for a lower tax burden to foster a robust economy, but emphasizes that tax reduction will be a gradual process. Despite having high tax revenues, the UK's tax rate remains lower than that of many Western European nations.