What are the key tests for Jeremy Hunt’s upcoming Budget?

Editorial: The real challenge for both the Tories and Labour this week is to show they have a credible plan to boost the UK’s anaemic levels of growth in recent times

Jeremy Hunt intends to deploy the usual mix of carrots and sticks to cajole people back into work (PA)

Jeremy Hunt’s honeymoon as chancellor will come to an end when he presents his first formal Budget on Wednesday. He and Rishi Sunak deserve credit for steadying the ship after the turbulence and financial market chaos unleashed by their predecessors Kwasi Kwarteng and Liz Truss. But now Conservative MPs, and the public, are looking for more than the “steady as she goes” approach Mr Hunt will probably offer this week.

Although the deficit in the current financial year will be about £30bn lower than forecast last November, Mr Hunt is unlikely to bow to the growing clamour from Tory MPs for immediate tax cuts. The scheduled rise in corporation tax next month, from 19 per cent to 25 per cent, will go ahead. It will be tempered by new allowances for much-needed business investment; though they may be less generous than Mr Sunak’s “super deduction” of 130 per cent tax relief, which is ending.

The chancellor’s headroom is smaller than it looks because the Office for Budget Responsibility fiscal watchdog is expected to downgrade its forecast for growth in the medium term. Mr Hunt will ask jittery Tory backbenchers to be patient, hinting that tax cuts will come nearer the general election next year. He is right to avoid such a giveaway now and would be wise to use any spare resources to end the several disputes over public sector pay so the country can move on from the debilitating wave of strikes.