Jeremy Hunt, the Chancellor, is facing a £16 billion gap in the budget as interest payments on Britain's debt surge. This development has caused Hunt to play down the possibility of tax cuts as he focuses on balancing the books.

Revenue shortfall dampens hopes of tax cuts

Hunt had been eyeing up £6 billion of headroom for giveaways in next month's Autumn Statement, according to insiders from the Treasury. However, the soaring cost of borrowing since the March Budget, paired with fears that interest rates will remain high for the foreseeable future, has made it difficult to secure additional funds. Hunt now needs to find an extra £23 billion to cover interest payments.

Blackhole in budget makes tax cuts unfeasible

Projections suggested that the UK would spend roughly £110 billion, or a tenth of its total revenue, on servicing debts by 2023. With the current financial situation and a significant blackhole in the budget, any hopes for tax cuts this autumn seem unaffordable. As a result, the Chancellor's office is now scrambling to identify potential savings.

Tax cuts on hold, says Hunt

During a speech at the Tory party conference in Manchester, Jeremy Hunt spoke at the Centre for Policy Studies fringe event, emphasizing the 'slightly academic' nature of discussing tax cuts in the current context. He expressed that the battle with inflation, coupled with the exponential increase in debt interest payments over the past six months, will likely prevent any potential tax cuts from materializing. With his spending review only six weeks away, Hunt's focus remains on tackling inflation.

Hunt stated, "We are sticking with the overriding importance of bringing down inflation because it's not helping any doctors or nurses to give them a pay rise, which then gets eaten away because inflation is higher next year. It doesn't just harm them, it harms absolutely everyone, and that's why it's so important we tackle inflation."

This development comes amidst a backdrop of ongoing strikes by consultants and junior doctors, who are currently engaged in a second set of coordinated strikes lasting three days.