Autumn Budget: What to expect
The Chancellor will tell us how the Government will spend taxes
Chancellor Jeremy Hunt is set to unveil tax cuts, measures to boost business investment and a tougher approach to welfare in his autumn statement later today.
The fall in inflation means "we have turned a corner", Treasury Chief Secretary Laura Trott said.
Official figures show that although Government borrowing in October was higher than expected, the year-to-date figure is still below the amount the budget watchdog had forecast.
Mr Hunt has insisted he will be "responsible with the nation's finances", but his statement on Wednesday will "focus on how we boost business investment and get people back into work".
Ms Trott, the Chancellor's deputy in the Treasury, defended the plans to get people off welfare and into jobs, saying it is the "duty" of those who can work to do so.
The plans could see those with mental health or mobility problems told to search for work which is possible to do from home.
Ms Trott told Sky News:
"I think that if you can work, as a principle you should work, and that is what the Government believes. That's been the thrust of all of our policies.
"Of course, there should be support for people to help them into work or to help them with issues that they're facing, but ultimately there is a duty on citizens that if they are able to go out to work, that's what they should do."
Prime Minister Rishi Sunak has raised expectations that the autumn statement will begin the process of reducing the tax burden, which is the highest for 70 years after the Government was forced to raise money to respond to Covid-19 and the energy price spike triggered by the Ukraine war.
He has met his self-imposed target of halving inflation in 2023, with the October figure showing the Consumer Prices Index at 4.6%, although that is still more than twice the Bank of England's goal of 2%.
Bank governor Andrew Bailey has warned it is "much too early" to say inflation has been beaten.
Changes to national insurance or income tax have reportedly been considered, though nothing has been confirmed.
Shadow work and pensions secretary Liz Kendall said:
"It's very interesting to see Rishi Sunak railing against the fact millions of people are out of work due to long-term sickness, saying it's a scandal they've been written off. Well, who's done that?
"Being out of work is bad for individuals. It's bad for businesses, and it's bad for the economy, but it's happened under their watch."
Ms Kendall accused the Government of "desperately trying to wipe their hands for the last 13 years that they are responsible for".