Chancellor's crisis warning before momentous Budget

Rachel Reeves's Budget has been plunged into another crisis just as she prepares to unveil it, with reports that efforts to kickstart the economy have stalled.

- DAVID MADDOX, MILLIE COOKE, KATE DEVLIN, CAITLIN DOHERTY

The chancellor is set to deliver her second Budget tomorrow, but Britain’s leading economic watchdog, the Office for Budget Responsibility (OBR), has reportedly downgraded its forecasts for growth in each year to 2029.

The business secretary, Peter Kyle, admitted yesterday that the country was locked in a “growth emergency” as business leaders at the annual Confederation of British Industry (CBI) conference told him they faced “death by a thousand taxes”.

The projections from the OBR are expected to be the most pessimistic since it was set up 15 years ago in the wake of the banking crisis, and they come despite strenuous efforts by Ms Reeves to persuade the watchdog not to downgrade its estimates.

The news could not come at a worse time for the chancellor, whose own job is believed to be on the line - just 18 months after she arrived in the Treasury with a “number one mission” of growing the economy.

So bad are the figures that in a speech to Labour MPs last night, the chancellor did not mention the word “growth” and replaced it with “fairness” and a promise to tackle the cost of living.

Experts have also piled on the pressure, warning that widely predicted measures - including a form of mansion tax on high-value properties, and a bank levy - will further harm growth. It also emerged that the Treasury is losing up to £90bn in tax revenue a year due to the economic impact of Brexit, according to analysis by the House of Commons library, based on research by the National Bureau of Economic Research, a US think tank.