Why tax cuts are still off Jeremy Hunt’s agenda

Better-than-expected borrowing figures are not enough to allow the government to appease Tory backbenchers, says Tom Peck

Chancellor Jeremy Hunt still needs to tackle inflation (PA/iStock/The Independent)

Lower than anticipated borrowing figures for July, amid a slightly improving economic situation, have led to calls for Jeremy Hunt and Rishi Sunak to cut taxes before the next election. Hunt has immediately dampened down the speculation.

How has the economic situation improved?

Public sector borrowing for July was £4.3bn. This is still an incredibly high number but it comes on the back of better than expected tax receipts, and is significantly lower than the £6bn that was forecast by the Office for Budget Responsibility in the spring budget. To understand the context of this “good news”, it means that the national debt is now merely 98.5 per cent of GDP. Earlier this year, it topped 100 per cent for the first time since such figures have been calculated, which was in 1961.