Tax cuts are being promised by several Conservative party leadership hopefuls, but a top official at the International Monetary Fund has warned it might be better to raise them instead.
"I think debt-financed tax cuts at this point would be a mistake," said Mark Flanagan, who leads the Fund's UK team, speaking to BBC News.
While the former Chancellor, Rishi Sunak, has argued against cutting taxes, other candidates have touted promises including cuts to the basic rate of income tax and further cuts in fuel duty.
Tax breaks could offer some relief for households struggling to cope with the steepest increase in food and energy bills in decades.
The IMF is among the groups predicting the UK could see the slowest growth and most painful inflation of any G7 nation in 2023, thanks, in part, to reliance on fossil fuels, a big driver of inflation.
However, Mr Flanagan said tax cuts could be misguided and might even boost inflation by strengthening spending.
Money raised through tax, he argued, could instead be used to invest in the country's long-term future and things like the energy transition.
"The UK does have a below-average tax ratio relative to the rest of the Organisation for Economic Co-operation and Development. You can't have it both ways," he said.
"At some point you have to decide, do we want to invest in the climate transition? Do we want invest in digitalisation? Do we want to invest in skills for the public. Well, if you do you need the resources to do it. And the way to realise those resources is to lift the tax ratio a little bit."
Inflation is expected to have remained at its highest level since 1982 for another month when the Office for National Statistics publishes its latest figures for June on Wednesday.
The Bank of England predicted in its most recent forecast that the consumer prices index would remain above 9% over the summer before jumping to just over 11 per cent in October, when it is expected to peak.
Analysts at the Pantheon Macroeconomics consultancy predict that consumer prices rose by about 9.1% in the year to June, matching the rate recorded in May.
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