Jeremy Hunt has said there is likely to be less scope for tax cuts in the March Budget than there was last autumn.
The chancellor told the BBC he wanted to "lighten the tax burden" to help grow the economy.
But he said this had to be done in a "responsible" way.
In last year's Autumn Statement, when the government sets out its tax and spending plans, Mr Hunt announced a cut to the main rate of National Insurance from 12% to 10%.
However, the Times newspaper reported that he had told a cabinet meeting this week that "major structural weaknesses" in the economy, including low productivity, meant there was likely to be less headroom for tax cuts in the upcoming Budget on 6 March.
Asked about the reports, Mr Hunt told the BBC's Political Thinking podcast he was awaiting the "final numbers" from the independent Office for Budget Responsibility (OBR).
The OBR produces economic forecasts for the government ahead of budgets, which include an indication of how much room for manoeuvre there might be for tax cuts or spending increases.
"It doesn't look to me like we will have the same scope for cutting taxes in the spring Budget that we had in the Autumn Statement," Mr Hunt said.
"And so I need to set people's expectations about the scale of what I'm doing because people need to know that when a Conservative government cuts taxes we will do so in a responsible and sensible way."
He added: "But we also want to be clear that the direction of travel we want to go in is to lighten the tax burden."
Pressed over whether this would disappoint some Conservative MPs, who have been calling for big tax cuts ahead of an expected general election this year, Mr Hunt said: "It is not Conservative to cut taxes by increasing borrowing because all you're doing is cutting the taxes paid by people today in exchange for increasing the taxes paid by our children tomorrow."
On Tuesday the International Monetary Fund (IMF) warned the UK against further tax cuts, saying preserving public services and investment implied higher spending than was reflected in the government's current plans.
Mr Hunt said he agreed with the IMF that "untargeted tax cuts that are just crowd pleasers" are not a good idea.
"But if they are strategic, smart tax cuts then that is a very important part of the strategy to grow the economy," he added.
The chancellor pointed to his decision to cut National Insurance and taxes for businesses in the Autumn Statement, which he said would encourage more people into work and boost investment.
Mr Hunt was also asked about comments from OBR boss Richard Hughes, who recently described the government's projected spending plans for individual departments as "a work of fiction", which "the government hasn't even bothered to write down".
"Those words are wrong and they shouldn't have been said," the chancellor said.
"The government decides spending plans and spending reviews. The next spending review will start in April 2025 and obviously until that point when that spending review is done, we don't publish our spending plans. No government ever has."
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2024-01-31 21:00:42Z
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