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Sunak and Hunt may have raised expectations too much

In this election year, the Conservatives have to remain relentlessly upbeat. They need to argue that after a troubled period, the UK is now on the right track.

That is why Rishi Sunak and Jeremy Hunt are constantly talking up the prospect of tax cuts. Lowering the tax burden (which is currently heading for a record high) would not only put money in people’s pockets directly, but also create a political dividing line with Labour.

There is just one little problem: it is far from certain that tax cuts are actually affordable.

With just over three weeks until the next Budget, it currently looks like any cut as sweeping as those in the Autumn Statement – when 2p was knocked off the rate of national insurance – is probably off the table.

The Chancellor may be tempted to flex his borrowing rules, but doing so would undermine the whole underpinning of the Sunak/Hunt regime, based firmly on fiscal responsibility even when that feels painful.

And things could well get more painful soon: as i reveals the Treasury is braced for a double dose of bad news with a rise in inflation and confirmation that Britain is in recession both seen as real possibilities.

No wonder that, I hear, some at the top of the Government are nervous about the way that Mr Sunak and Mr Hunt have ramped up expectations for a giveaway Budget they may struggle to deliver on.

Despite all the sound and fury about the PM’s performance, Labour’s policy problems and all the rest of it, that old rule remains true when it comes to elections: it’s the economy, stupid.

The Tories have lost their reputation for sound economic management since the disastrous Liz Truss episode. There is still a lot of work to do before they can win it back.

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