CHANCELLOR’S £26BN TAX HIKE RAISES BURDEN TO AN ‘ALL-TIME HIGH’

RACHEL Reeves hiked taxes by £26billion as she faced forecasts of weaker economic growth, faster inflation and higher unemployment.

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The Chancellor's measures, including a freeze on income tax thresholds which will leave 1.7 million people paying more, take the tax burden to an all-time high according to the Office for Budget Responsibility (OBR).

The tax hikes come in response to downgraded economic forecasts but also increased welfare spending because of the abolition of the two-child benefit cap and the Labour revolt over attempts to curb the benefits bill.

Ms Reeves also used some of the tax take to build herself a bigger buffer against her borrowing rules.

But she also spent some of it on scrapping the two-child limit for universal credit - a measure to ease child poverty warmly welcomed by Labour MPs but costing £3bn a year by 2029/30.

Measures to save £150 from the average household energy bill will cost £3bn next year and an average £2bn in the following two years.

In an unprecedented blunder, full details of Ms Reeves's plans were published by the OBR more than half an hour before she stood up in the Commons chamber.

The budget watchdog forecast gross domestic product would grow by 1.5% this year, an increase from its earlier 1% forecast.

But it downgraded growth in 2026 from 1.9% to 1.4%, in 2027 from 1.8% to 1.5%, in 2028 from 1.7% to 1.5% and in 2029 from 1.8% to 1.5%.