The expectations were fueled by calls for tax cuts, with senior Conservative MPs urging Hunt for any additional fiscal scope to ease the burden on people before the general election.
Sir Iain Duncan Smith, former leader of the Conservative Party, said: “We now need to significantly reduce the burden on businesses and individuals.
“these [forecasts] It shows that the Office for Budget Responsibility and others have got their forecasts completely wrong in substance so far, and we risk over-tightening the economy at a time when we should actually be easing it back to a full recovery.
Former business secretary Sir Jacob Rees-Mogg said: “The Office for Budget Responsibility’s record is appalling, and setting economic policy in line with its forecasts is a mistake. If there were such a rise it would be possible to raise the thresholds, reducing the impact of fiscal drag.”
The National Institute of Economic and Social Research proposed using the money for additional public investments, including skills training and infrastructure. He also raised the possibility of increasing income tax thresholds.
A Treasury source said the forecast was “far from reality”, anticipating a tougher set of forecasts from the Office for Budget Responsibility.
A Treasury spokesman said: “It is not clear from their report how the rise figure is calculated, and the autumn statement will depend on forecasts from the independent Budget Control Office.”
The OBR declined to comment.
Meanwhile, bond markets rose after signals from Hugh Bell, chief economist at the Bank of England, that officials may start cutting interest rates next year.
The interest rate that financial markets charge the government to borrow for 10 years fell to 4.3%, compared to more than 4.7% late last month.