Rishi Sunak believes that deficit-financed tax cuts would worsen inflation. In last week’s leadership debate, the former chancellor branded proposals from Liz Truss, his fellow candidate, to cut national insurance, lift income tax thresholds and abandon his corporation tax hike as “something-for-nothing economics” that would raise prices. Despite couching himself as a sober truth-teller, macroeconomists are uncertain that he’s right.

Established theories do state that, if other things stay the same, more government borrowing could raise inflation. For Keynesians, tax cuts stimulate aggregate demand by raising disposable incomes and so spending; for monetarists such as Tim Congdon, if “the enlarged budget deficit is financed from the banks and therefore creates new money, tax cuts are inflationary”. Given that UK money GDP (a demand proxy) is already running above its historic trend, both theories suggest more government borrowing risks raising the price level.

Yet few economists believe this is the end of the story. “Inflation … is determined by monetary policy,” Scott Sumner, the American “market monetarist”, told me. If the Bank of England takes its mandate seriously, why would it not “offset” the inflationary impulse of new borrowing by tightening monetary policy, too?

Such “monetary dominance” is the norm for developed economies. Milton Friedman, the Nobel prize-winner, observed that in 1966 American monetary policy tightened as fiscal policy loosened. Inflation fell. More recently, President Trump’s big net tax cuts did not raise inflation there, despite the additional red ink.

It’s not as if the Bank makes its decisions in a vacuum. Julian Jessop, the economist, points out that Bank staff believe the government’s cost of living package (net cost £10 billion) could raise consumer prices index inflation by only 0.1 percentage points. The inflationary effects of £30 billion to £40 billion of tax cuts is therefore still small, at worst, but likely close to zero with monetary tightening.

True, a combination of tax cuts and higher interest rates might make inflation more volatile, given tax cuts have faster effects than monetary operations. But, as Jagjit Chadha, director of the National Institute of Economic and Social Research, has explained, the primary impact of tax cuts is not in raising inflation but in redistributing income, from those with variable rate loans or mortgages to tax cuts’ beneficiaries.

Whether tax cuts are good policy therefore should hinge on other considerations. The best case for them is that an attractive corporation tax regime is required to provide incentive for investment post-Brexit, that reducing national insurance rates will encourage work and that income tax thresholds always should be tied to prices to prevent an arbitrary inflation tax.

The most persuasive counter is that unfunded tax cuts worsen our longer-term fiscal trajectory for perhaps little growth gain. If perceived to be temporary, they will not do much to improve work or investment incentives. If permanent, they eventually must be accompanied by paring down spending, or else they will heighten risks that the public will begin thinking fiscal policy is unsustainable, making monetisation and inflation more likely.

“A short-lived anti-austerity plan has very little effect on inflation if it does not change those long-run expectations,” John Cochrane, the Stanford economist, told me, but “tax cuts that are not growth-oriented, or that point to a deficit spiral, can make things worse fast”.

So would these tax cuts worsen inflation? To believe so confidently, Rishi Sunak must think the Bank of England is incompetent or that his opponents have no intention of ever restraining spending.