Hunt is raising hopes for tax cuts ahead of the election after inflation fell to a two-year low

CHANCELLOR Jeremy Hunt raised hopes of tax cuts before the election yesterday after inflation fell to its lowest level in two years.

He said the drop “opens the door” to lower interest rates, which would make mortgages cheaper.

And he said this could mean the opportunity to “stimulate growth and make work pay” by cutting national insurance rates.

It will be welcome news for Prime Minister Rishi Sunak, under pressure amid speculation of a challenge to his leadership.

At a meeting of the 1922 Committee last night, Mr Sunak urged backstabbing Tory MPs to work together and dismissed “Westminster gossip” about conspiracies.

Supporters greeted him by banging tables and described his speech as “uplifting”.

Mr Sunak also told the BBC that he would still be Prime Minister after the May 2 local elections, saying that “2024 will prove to be the year the economy recovers”.

Inflation fell from 4 percent to a better-than-expected 3.4 percent as the costs of buying food and eating out fell.

There is plenty of speculation about a mini-budget in the US autumn before the country goes to the polls.

Mr Hunt, who cut the NI rate by 4p, said: “As inflation gets closer to its level goalThat opens the door for the Bank of England to consider cutting interest rates, that brings mortgage rates down, that makes a big difference.

“It is far too early to know whether there will be another budget event before the election, but you can see that the tough decisions the government has made over the past year are paying off.”

Bank executives today plan to keep interest rates at 5.25 percent because inflation, which stood at 11 percent in 2022, is still above the two percent target.

Mr Sunak said the fall was “good news for you, your family and the country”.

But Labor shadow chancellor Rachel Reeves insisted: “Prices are still high tax The costs are the highest in seventy years and mortgage costs are rising.”