Will UK Chancellor Cut Income Tax in Autumn Mini-Budget?

Chancellor Jeremy Hunt has previously ruled out tax cuts of the kind that spooked City of London finance chiefs a year ago — and saw his predecessor Kwasi Kwarteng sacked after just weeks in the job. But with elections expected next year and the Tories trailing Labour in the polls, populist measures may be in order.

Cuts to income tax have been mooted in British chancellor of the exchequer's autumn mini-budget.

Most of the measures in Jeremy Hunt's autumn statement have reportedly already been finalized ahead of his speech to Parliament on Wednesday, with the exception of inheritance tax — which many in his Conservative Party want to see cut, along with corporation and income taxes.

The chancellor said on Sunday that he wanted to put the country on a "path" to eventual lower taxation after years of hikes.

Political pundits took that to mean that Hunt would announce cuts to income tax on Wednesday, with more to come in the main budget next spring.

Hunt has previously ruled out tax cuts, but a series of heavy by-election defeats for the Tories and the looming spectre of a general election in the next year has added pressure for popular concessions.

The British economy has seen months of flatlining growth, as the bank of England raised interest rates above five percent in a bid to tame record levels of inflation — a result of the COVID-19 lockdown and sanctions on Russia.

The country has also been rocked by a wave of strikes as public- and private-sector pay offers fail to match the increase in the cost of living.

Prime Minister Rishi Sunak needs to calm rumblings of discontent from the Tory back benches over both high taxation and the sacking of leading pro-Brexit figures, including former home secretary Suella Braverman, from his cabinet last week.

Hunt's predecessor Kwasi Kwarteng, who was sacked by short-lived PM Liz Truss and replaced on the demand of the City of London following his tax-cutting mini-budget a year earlier, said Sunak was in "a very difficult situation."

"You've got to remember that Jeremy Hunt wasn't appointed by him," Kwarteng told a TV interviewer on Sunday. "Let's state a fact: most prime ministers choose their own chancellor, and he didn't. Enough said."