Jeremy Hunt should not cut taxes in the upcoming Budget because the UK needs the money for public services, according to the International Monetary Fund.
In a major blow to the chancellor and Rishi Sunak, the highly-respected body also cast serious doubts on the government’s spending plans.
The IMF also downgraded its growth forecast for the UK economy this year from 2% to 1.6%.
Both Hunt and the prime minister have dropped multiple hints that they plan to cut taxes in the run-up to the general election.
But critics have pointed out that the overall burden of taxation is still at a post-war high.
The IMF said: “Preserving high-quality public services, and undertaking critical public investments to boost growth and achieve the net zero targets, will imply higher spending needs over the medium term than are currently reflected in the government’s budget plans.
“The IMF has recommended strengthening carbon and property taxation, eliminating loopholes in wealth and income taxation, and reforming the pensions triple lock.
“It is in this context that staff advises against further tax cuts.”
But Hunt hit back: “It is too early to know whether further reductions in tax will be affordable in the Budget, but we continue to believe that smart tax reductions can make a big difference in boosting growth.”
A number of polls in recent weeks have shown that the public would rather the government spent any spare money it has on improving public services rather than tax cuts.
But despite this, the PM has said: “I just think [tax cuts are] something actually people want — I want to deliver that.”
