Rachel Reeves admits new tax hikes coming in just weeks as Labour frantically tries to fill £30BILLION black hole

Ms Reeves is set to arrive in Washington DC today for talks at the International Monetary Fund (IMF) after it warned UK inflation is set to surge to the highest in the G7 in 2025 and 2026.

She hinted that relaxing fiscal rules was not an option and that as a result, tax rises would be essential.

She told Sky News: "I won't duck those challenges.

"Of course, we're looking at tax and spending as well," Ms Reeves added.

"But the numbers will always add up with me as Chancellor because we saw just three years ago what happens when a Government, where the Conservatives, lost control of the public finances: inflation and interest rates went through the roof."

The Chancellor also took aim at Brexit, saying the impact of leaving the EU is "severe and long-lasting."

Ms Reeves added: "Austerity, Brexit, and the ongoing impact of Liz Truss's mini-budget, all of those things have weighed heavily on the UK economy.

"Already, people thought that the UK economy would be four per cent smaller because of Brexit.

"Now, of course, we are undoing some of that damage by the deal that we did with the EU earlier this year on food and farming, goods moving between us and the continent, on energy and electricity trading, on an ambitious youth mobility scheme.

"But there is no doubting that the impact of Brexit is severe and long-lasting."

Ms Reeves said that was "why we are trying to do trade deals around the world".

That included the "US, India, but most importantly with the EU so that our exporters here in Britain have a chance to sell things made here all around the world".

According to the National Institute of Economic and Social Research (Niesr), Ms Reeves needs to find about £50billion a year by 2029-39 to meet her goal of balancing day-to-day spending with tax revenues.

It must also maintain a "headroom" of about £10billion against that target.

Asked about whether she was now in a "doom-loop" of having to regularly hike taxes to fill a black hole, the Chancellor said she wouldn't use that language.

"Nobody wants that cycle to end more than I do," she said.

"Challenges are being thrown our way, whether that is the geopolitical uncertainties, the conflict around the world, the increased tariffs and barriers to trade and now this review looking at how productive our economy has been in the past and then projecting that forward."

Ms Reeves said she won't "duck those challenges".

She said reforms to the planning system could help "get back to building in Britain".

"For too long we've been in the slow lane of economic growth," Ms Reeves said.

"Because we haven't signed off projects and if the answer to big investments in Britain is always 'no', we're going to carry on getting the same results in terms of poor growth and the lack of improvement standards."

Ms Reeves' comments came just before she headed to the United States for the International Monetary Fund (IMF) meeting.