Millions boosted by tax cut as Hunt goes for growth

Rewards for workers and businesses in huge drive before election

- Nicholas Cecil and Jitendra Joshi

JEREMY HUNT vowed to "reward" workers today as he cut taxes in a dash for economic growth.

The Chancellor ramped up action to kick-start the flatlining economy after the Bank of England predicted barely any growth at all for 2024 and 2025.

He extended a whopping tax break for businesses to encourage them to invest more in new plant and machinery. Tens of millions of workers were also expected to benefit from a cut in National Insurance.

The moves were part of his go-for growth strategy ahead of the general election expected next year and signalled a sharp shift from the priority of slashing inflation. The new strategy could bump up GDP growth to around 0.7 per cent next year, rising to close to 1.4 per cent the following year.

The Chancellor was expected to see his "fiscal headroom" grow from £6.5 billion in March to around four times the size as the Treasury has seen revenues rise, partly due to the freeze on personal tax thresholds bringing in more than expected due to high inflation pushing up wages.

But the extra billions being ploughed into the economy risk putting upwards pressure on inflation which the Bank's Governor Andrew Bailey has warned may fall more slowly than expected by the markets. Inflation was expected to be on track to be around 2.8 per cent at the end of 2024, and some two per cent the following year, with Rishi Sunak having met his pledge to halve it this year, with a fall from 10.7 per cent in January to 4.6 per cent in October.