Jeremy Hunt warned against real-terms benefits cut in autumn statement

Labour MP says cut would be catastrophic for families' amid reports chancellor mulling move to make space for tax reductions

The prospect of real-terms cuts to benefits in the government's autumn statement has been described as catastrophic" for families, after it was suggested that Jeremy Hunt was considering the move to make space for pre-election tax reductions.

Sources close to the chancellor declined to deny a report by Bloomberg that he was considering breaking with the tradition of lifting working benefits in line with inflation.