£10bn rise in taxes ahead as inflation soars, fear analysts

RACHEL Reeves is expected to raise taxes by at least £10billion in the autumn as rising inflation and increased spending eat into the Treasury's fiscal headroom.

- By Elliot Gulliver-Needham

With an increase in defence spending and plans to ease the winter fuel payment cuts, the Chancellor is likely to make further tax hikes to comply with her fiscal rules.

Deutsche Bank analysts said: "With a tough spending review due in June, we expect fiscal news to worsen over the coming months. By the time the budget rolls around, the Chancellor's fiscal headroom will have likely evaporated."

Combined with higher interest costs and higher unemployment, borrowing pressures will only increase, the analysts said.