Rishi Sunak has promised to cut tax “carefully and sustainably” after meeting his target of halving inflation.
The Prime Minister did not give specifics about how the tax burden would be reduced ahead of Wednesday’s autumn statement.
But Mr Sunak said he was able to move on to the “next phase” of the Government’s economic plan after inflation fell to 4.6% in October.
In a speech at a London college, he said: “We will do this in a serious, responsible way, based on fiscal rules to deliver sound money, and alongside the independent forecasts of the Office for Budget Responsibility.
“And we can’t do everything all at once. It will take discipline and we need to prioritise.
“But over time, we can and we will cut taxes.”
Although Mr Sunak has met his own pledge of halving inflation in 2023, the rate of the Consumer Prices Index is still well above the Bank of England’s 2% target.
The prospect of tax giveaways comes ahead of a general election expected next year and with the Tories seeking a boost to turn around opinion polls which have shown consistent Labour leads.
Mr Sunak said he was taking “five long-term decisions” for the economy and public finances.
They would focus on reducing debt, cutting tax, building sustainable energy, backing British businesses and delivering world-class education.
He contrasted his approach to the public finances with that of Labour and his predecessor Liz Truss.
He claimed Sir Keir Starmer and Rachel Reeves wanted to continue the “big government, big spending approach” of the pandemic, with up to £28 billion of borrowing a year for Labour’s green plans.
“This makes the same economic mistake as last year’s mini-budget, blowing tens of billions of pounds on unfunded spending is just as dangerous as blowing tens of billions of pounds on unfunded tax cuts.”
