Rachel Reeves vows to 'grip the cost of living crisis' as tax hikes loom

However, the Chancellor is also expected to unveil tax rises on November 26 as she looks to plug a multibillion-pound hole in the public finances.

Writing in The Mirror, Ms Reeves admitted that soaring prices “hit ordinary families most” and warned the economy “feels stuck” for many.

She wrote: “That’s why in my Budget on Wednesday I will take action to grip the cost of living."

The Chancellor is facing sluggish growth, stubborn inflation and a likely downgrade to productivity forecasts as she puts the finishing touches to her statement.

“Delivering on our promise to make people better off is not possible if we don’t get a grip on inflation,” Ms Reeves wrote in The Sunday Times.

“It is a fundamental precursor to economic growth. It is essential to make families better off and for businesses to thrive.

“There is an urgent need to ease the pressure on households now. It will require direct action by this government to get inflation under control.”

The Chancellor said reforms would shift the welfare system away from “trapping millions of people on benefits” and towards one “designed to help people succeed”.

Sir Keir Starmer refused to get ahead of the Chancellor when pressed by reporters at the G20 in South Africa on whether he could rule out tax rises in future Labour budgets.

The Prime Minister said: “Obviously I do want the Budget to focus on growth, stability, which is the two pillars that are really important.”

Among the speculated measures is an extension of the freeze on income tax thresholds, which could push more people into paying tax for the first time or see others moved into a higher rate as their wages rise.

Conservative leader Kemi Badenoch said Ms Reeves should “have the balls” to admit that such a move would break Labour’s manifesto pledge not to raise taxes on working people.

Shadow Chancellor Sir Mel Stride told the Sunday Express that the Chancellor should resign from her post if she breaks the manifesto promise.

Meanwhile, Reform UK leader Nigel Farage said that the Budget “looks set to hammer pensioners, savers, homeowners, small business owners and working people”.

According to the Institute for Fiscal Studies, freezing national insurance and income tax thresholds for an additional two years, until April 2030, is projected to raise roughly £8.3billion annually by 2029/30.

The Chancellor is also expected to remove the two-child benefit cap, a move that could cost more than £3billion.

Ms Reeves is expected to boost a grant reducing upfront costs for electric car buyers by £1.3billion, but is also set to introduce a pay-per-mile scheme.

Meanwhile, around £48million is said to be earmarked for 350 new planners to help the Government meet its target of building 1.5 million new homes.

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