Reeves refuses to rule out income tax rises and warns 'each of us must do our bit'

Rachel Reeves has put the country on notice that sweeping tax rises are coming in her Budget, warning "we will all have to contribute" to building a new future for Britain.

- MILLIE COOKE, KATE DEVLIN

Promising to put the national interest above "political expediency", the chancellor signalled she is ready to break Labour's manifesto commitment not to raise income tax, personal national insurance or VAT.

Instead, the chancellor said "each of us must do our bit" - her strongest indication yet that she will raise income tax across the board when she delivers the Budget on 26 November.

She blamed global problems such as Donald Trump's tariff war and lowered economic forecasts for the "hard choices" she will make.

After the chancellor delivered her unprecedented pre-Budget speech:

• The pound fell to a six-month low against the dollar

• Tory leader Kemi Badenoch dismissed it as "one long waffle bomb"

• Chancellor ruled out "going down the path" of austerity

It comes as Ms Reeves scrambles to fill a black hole of up to £50bn in the public finances while keeping to her golden rule of funding day-to-day spending with tax receipts.

"I will do what is necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity and to ensure that the economy that we hand down to future generations is secure with debt under control," she said.

"If we are to build the future of Britain together, we will all have to contribute to that effort. Each of us must do our bit for the security of our country and the brightness of its future." But a former key adviser to Ms Reeves warned her that hiking income tax might not be enough.

Former Treasury minister Jim O'Neill said the markets had interpreted her speech to mean "the manifesto pledge is going to be broken and taxes are going to go up".