Politics latest: PM warned against starting 'full blown trade war' with EU; Starmer being investigated by standards commissioner

The Prime Minister has said taxes are being cut “as fast as we can” as he came under pressure to slash the amounts paid to the government by households and businesses.

The Prime Minister was speaking after Gerard Lyons – who advised him when he was mayor of London – called for cuts to income and corporation tax.

Mr Lyons suggested the latest figures showing a decline in the UK economy highlight the need for a tax-cutting stimulus.

Gross domestic product fell by 0.3% in April, following on from a 0.1% fall in March.

Mr Lyons, who was picked by Mr Johnson as his chief economic adviser in City Hall, said: “The economy is losing momentum. It is not just a cost-of-living crisis but a weakening growth picture that policymakers have to contend with.

“Given this economic backdrop, while the direction for monetary policy is tighter, the speed, scale and sequencing of this tightening needs to be sensitive to economic conditions.

“The slowing economy justifies fiscal easing and the argument in favour of appropriate tax cuts.”

Mr Johnson told LBC Radio in response: “We want to make sure that we do everything we can to reduce the burden of taxation.”

The PM added: “He (Mr Lyons) will understand that we are bringing in tax cuts as fast as we can but what we have also got to do is look after people in a tough time.”

The country has been hit by an inflationary spike, Mr Johnson said, and “the thing that needs doing at the moment is looking after people who are facing increases in the cost of living”.