Fears of further tax rises as Reeves promises to 'secure Britain's future'

Chancellor to confirm welfare cuts and defence boost in spring statement

- Heather Stewart Kiran Stacey Richard Partington

Rachel Reeves will promise to "secure Britain's future" by boosting defence spending in today's spring statement amid mounting speculation that she will be forced to raise taxes in the autumn.

Speaking to MPs in response to new forecasts from the Office for Budget Responsibility (OBR), the chancellor will announce an extra £2.2bn for defence next year.

The money is a down payment against the government's target of spending 2.5% of GDP on defence - paid for by cutting aid spending and dipping into the Treasury reserve.

Reeves will restate the government "ambition" to spend 3% of GDP on defence in the next parliament "as economic and fiscal conditions allow". She will confirm the £5bn in controversial welfare cuts announced last week and publish impact assessments that will reveal how individuals could be hit.

She is also expected to squeeze future Whitehall spending plans to stay on target to meet her fiscal rules despite weaker OBR projections - with full details to be set out in June's spending review.

Since the OBR assessment in October, government borrowing costs have risen and economic growth has been weaker than expected.

Reeves will underscore her determination to go "further and faster" to boost economic growth, with the OBR expected to have revised down its GDP forecast in the short term because of weaker than expected data at the end of last year.

Reeves had been urged by some in the Labour party to flex her fiscal rules instead of outlining future spending cuts - but the Treasury fears that any sign of indiscipline would risk spooking bond markets and driving borrowing costs up further.

With Donald Trump's administration withdrawing from transatlantic defence cooperation and threatening to impose sweeping tariffs next month, Reeves will repeatedly stress how much the global context has changed.