Treasury insiders also cautioned that such projections are highly prone to change as they are subject to factors outside the Government’s control.
Reforms to inheritance tax could include reducing the headline 40 per cent rate, or simplifying the system so that all families can pass on £1 million tax free.
Meanwhile, options under consideration on stamp duty include a rebate for buyers who improve the energy efficiency of their new home within two years.
Mr Hunt will receive another update from the OBR on Tuesday, and then one further set of figures ahead of the Autumn Statement on November 22.
As things stand, it is more likely that the Chancellor will choose to park tax cuts for now and wait to take bolder measures in his Spring Budget next year.
But he is coming under increasing pressure from Tory MPs to take swifter action after the party suffered two humiliating by-election defeats to Labour.
Pressure from backbench Tories
The Telegraph can reveal that backbenchers on the right of the party have submitted their own draft Autumn Statement to No 10 demanding tax cuts.
Drawn up by Sir John Redwood, who headed Margaret Thatcher’s policy unit, it urges ministers to crackdown on benefits and delay Net Zero spending.
He proposes that Mr Hunt should cut fuel duty by a further 5p and suspend VAT on energy bills while the price of a barrel of oil remains above $75.
The former cabinet minister suggested setting the threshold at $75 for a barrel of oil, meaning the cuts would be reversed if the price fell below that.
He also urged ministers to ease the burden on small businesses by raising the turnover level at which they begin paying VAT from £85,000 to £250,000.
On top of that he called for a further reduction in business rates and said burdensome tax rules that are hammering the self-employed should be reversed.
Mr Redwood said: “The budget should go for tax cuts and spending controls which boost growth, cut inflation and cut the need to borrow.”
Alternative set of proposals
His alternative Autumn Statement proposals were approved by a meeting of the European Research Group of MPs at a meeting in Westminster last week.
The Telegraph understands they were also sent to members of other caucuses within the Tory party, including the Common Sense grouping.
It comes following speculation that Rishi Sunak could look to replace Mr Hunt in response to the by-election drubbings in Tamworth and Mid-Bedfordshire.
Some Tory MPs have been clamouring for a new chancellor to come in and radically change direction in a bid to turn around their party’s fortunes.
Downing Street took the unusual step over the weekend of briefing that Mr Hunt would not be shuffled out and that he is safe in his job until at least next Spring.
There has been talk that the Surrey MP, who only holds an 8,800 majority over the Liberal Democrats in his seat, may stand down at the next election.
William Turner is a seasoned U.K. correspondent with a deep understanding of domestic affairs. With a passion for British politics and culture, he provides insightful analysis and comprehensive coverage of events within the United Kingdom.
