Rishi Sunak signaled that he was “confident” that his government could cut taxes before the next election.
However, the Prime Minister said it was still the “right economic policy” to focus on delivering on his promise to halve inflation by the end of the year.
The British President named this commitment as one of his five promises to his voters in a speech in January.
Following his speech on artificial intelligence on Thursday, Mr Sunak said: “When we get inflation down, it’s time to look forward and of course I want to get the country into a lower tax economy.”
“And I am confident that we can do that. But first we have to ensure that inflation is reduced.”
There have been loud calls from the right wing of his Conservative backbenchers for tax cuts to be introduced before the country goes to the polls to elect the next government in Westminster.
Numerous Tory MPs, including former business minister Sir Jacob Rees-Mogg, have pledged not to vote for Chancellor of the Exchequer Jeremy Hunt’s autumn statement next month if it increases the overall tax burden for the UK.
General elections are due to be held before January 2025 and there is speculation about when Conservative Party leader Sunak will decide to visit the country.
A flashy promotional video released by 10 Downing Street on Wednesday to mark Mr Sunak’s one-year anniversary in office fuelled speculation that a general election could be called next autumn.
The 46-second clip, posted on Downing Street’s YouTube channel, provides a quick overview of Mr Sunak’s policy priorities over the past 12 months.
Viewers are asked: “So what can a country achieve in 52 weeks? Stay tuned.”
However, another electoral test for the government could come much sooner than autumn 2024, as the prospect of another by-election looms.
The House of Commons on Wednesday approved a six-week suspension of Peter Bone, MP for Wellingborough, after an independent investigation confirmed allegations of bullying and sexual abuse against a member of staff.
A recall petition is being tabled which will trigger a by-election if signed by 10% of voters in his Northamptonshire constituency.
The 18,500-vote majority secured by Mr Bone in 2019 – he had his Tory party vote withdrawn before his suspension – is smaller than the majorities Labour wiped out in the Tamworth and Mid Bedfordshire by-elections last week.
In most opinion polls, the Tories remain almost 20 points behind Labour.
Asked if he wanted to introduce tax cuts to reverse the Tories’ electoral victory, Sunak said: “I have always been clear that of course I want to cut people’s taxes – I am a Conservative, I believe in doing that.”
“But when I became prime minister, my priority was to reduce inflation.
“And as I said then, the biggest tax cut we can give the country is halving inflation. Because inflation makes people poorer, drives up prices and eats into savings.
“And that is entirely in the tradition of Margaret Thatcher and Nigel Lawson, and I believe that is the right economic policy.”
Inflation is currently at 6.7 percent, and the figures released in November are expected to show a significant decline, mainly due to the reduction in the energy price cap.
To achieve his target, Mr Sunak says inflation must fall to 5.3 percent by the end of the year.
