The Times reported yesterday that No 10's chief of staff Steve Barclay had suggested the temporary reduction in the 20 per cent rate of tax in the hope of easing tax bills for millions and blunting the spiralling rate of inflation.
It comes after modelling from the Office for National Statistics (ONS) revealed that the rate of inflation in the UK, at 9.1 per cent, had reached its highest point since at least February 1982.
But the plans - which would see VAT cut to 17.5 per cent - have reportedly stirred up controversy within the Treasury, due to fears it could overstimulate the economy and stoke the already raging rate of inflation.
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