Tax cut pledges by Tory leadership hopefuls ‘risk stoking inflation and inequality’

Economists and Conservative opponents say proposals would blow hole in public finances

The scale of tax cuts promised by Conservative leadership hopefuls would blow a hole in the public finances and could lead to rampant inflation, Tory opponents and economists have warned.

Nadhim Zahawi, who took over as chancellor last week, used a leadership speech on Monday to announce tax policies that would cost an estimated 50bn a year, almost as much as the combined budgets of the Ministry of Defence and Foreign Office.