The Swedish government's autumn budget later this month will fight inflation while supporting working households, Prime Minister Ulf Kristersson said on Monday.

Households with average incomes will get tax cuts in 2024 in the form of a new in-work tax credit of around 11 billion Swedish crowns ($999.16 million), the prime minister told a joint news conference with Finance Minister Elisabeth Svantesson.

"Ordinary workers will get the tax cuts we've promised," Svantesson said.

The right-of-centre government will pay for the tax cut by pausing an automatic hike in the threshold for paying state taxes, saving some 12 billion Swedish crowns ($1.1 billion), Svantesson said.

Kristersson warned that the government would squeeze benefit payments to those outside the labour market.

"It shouldn't be possible to live on benefits for a long time if you can work." he said.

The government said last month that the budget - due on Sept. 20 - would focus on supporting welfare services, defence and incentivising people to work, with new spending and tax cuts totalling around 40 billion crowns ($3.6 billion).

Svantesson underlined the need for restraint in new spending, despite a slowdown in the economy, as a way to press down inflation.

"Fighting inflation is the most important thing here and now," she said.

Swedish consumer prices, measured with a fixed interest rate, were up 6.4% in July from a year earlier, the statistics office (SCB) reported last month, more than three times the central bank's target of 2% headline inflation.

The economy shrank 0.8% in the second quarter from the previous three months, SCB data showed last week, hit by soaring interest rates and falling exports. ($1 = 11.0093 Swedish crowns)

(Reporting by Terje Solsvik and Simon Johnson, editing by Essi Lehto and Philippa Fletcher)