Proactive Investors - Jeremy Hunt is set for more calls for tax cuts in his Autumn Statement from within his party after a think tank calculated the Chancellor's cash surplus might be double previous forecasts.
According to the Resolution Foundation, the Chancellor will have £13 billion spare when he stands up on 22 November compared to previous forecasts of £6.5 billion.
Tories have been calling for a big tax boost to lift their slumping poll ratings and to stimulate the economy, but Hunt and Prime Minister Rishi Sunak have consistently stated there is little to hand out.
The Resolution Foundation calculates fiscal drag, or people moving into higher tax brackets due to pay inflation, has boosted the government’s coffers, albeit possibly only in the short term.
Tax revenues might be more than expected but this is "illusory" as it depends on a major squeeze on public spending in coming years, said the Foundation, adding it believes this is improbable.
Previous Tory chancellors have also had much larger pots to hand out ahead of an election, the Foundation noted.
Leaks so far have suggested a big cut or even the abolition of inheritance tax plus reductions in income tax are possible, though commentators suggest that any pre-election boost would likely come next spring in the Budget.
Abolishing inheritance tax would cost £7 billion.
An election has to be called by January 2025 at the latest.