Rishi Sunak is expected to use a speech to paint a more positive picture of the economy ahead of the autumn statement, which Jeremy Hunt has signaled could be used to cut business taxes.
The Prime Minister will be cheering after last week delivering on his pledge to halve inflation as he gives an update on the state of the country's finances in London on Monday morning.
Mr Hunt, the chancellor, raised expectations that business could find some relief in his financial statements on Wednesday as he said now was the time to boost growth.
However, he persistently warned against changes that could fuel inflation, curbing speculation that income tax pressures could ease.
Mr Hunt suggested during a round of interviews on Sunday that the personal tax burden would not be reduced “overnight” as he seeks to avoid another rise in prices.
The chancellor made it clear to Times Radio that his “priority is supporting British business” and making changes that “unlock growth”.
Pressed on whether income tax could be relaxed, he stressed the need to act “in a responsible manner”.
“I want to show people that there is a path to lower taxes. But we also want to be honest with people, this is not going to happen overnight,” he said. “It takes a tremendous amount of discipline every year.”
Mr Hunt said he would not take action that would “jeopardise” the fight against inflation, which is higher than desired at 4.6%, although it has halved over the past year.
“The one thing we won't do is any kind of tax cut that feeds inflation. We've done all this hard work, we're not going to throw it away,” he told Sky News.
Labour's shadow leader Rachel Reeves has warned that cutting inheritance tax during a cost of living crisis would be a mistake amid some Tory concern over the potential move.
While it would be popular with the Conservative Right who have been clamoring for tax cuts, other Tories have warned that this is not the time to hand out a handout for the rich.
Ms Reeves told the BBC's Sunday With Laura Kuensberg programme: “Reducing inheritance tax in the midst of a huge cost of living crisis and when public services are on their knees is not the right priority.
“I understand people's desire to pass on to their children what they have worked hard for, but at the moment that is not the right thing to do and we would not support it.”
He also rejected Mr Hunt's argument that he has to make “difficult decisions” on welfare payments.
Normally, ministers use the September figure for inflation when upgrading working-age benefits, which would mean a 6.7% increase.
However, the chancellor considered using October's much lower rate of 4.6%, which economists say would cut spending by around £3bn.
According to the Institute for Fiscal Studies (IFS), the savings will hit hard at working-age households on disability or means-tested benefits.
Only around 4% of deaths in 2020/21 resulted in inheritance tax being paid, with exemptions allowing many couples to pass on up to £1 million tax-free.
Inheritance tax is charged at 40% on estates over £325,000, with an additional £175,000 for a main residence passed to direct descendants.
Abolishing it completely could cost £7 billion a year in the short term, but the IFS forecast could rise to more than £15 billion by 2033.
Meanwhile, a recording leaked by the Telegraph showed payments strategist John Glenn questioning universal winter fuel payments to wealthy pensioners.
Mr Glenn, then chief secretary to the Treasury, asked at a Cambridge University Conservative event last month whether the triple lock on pensions was “sustainable”.
The Treasury ruled out a change to the winter fuel allowance in its autumn statement, with a spokesman saying: “That's not something we're going to do.”