Rachel Reeves has admitted new tax hikes will be coming as part of her Autumn Budget.
It is the first time the Chancellor publicly confirmed tax rises are on the cards in the Budget, which she is set to deliver on November 26.
Ms Reeves is set to arrive in Washington DC today for talks at the International Monetary Fund (IMF) after it warned UK inflation is set to surge to the highest in the G7 in 2025 and 2026.
She hinted that relaxing fiscal rules was not an option and that as a result, tax rises would be essential.
She told Sky News: “I won’t duck those challenges.
“Of course, we’re looking at tax and spending as well, but the numbers will always add up with me as chancellor because we saw just three years ago what happens when a Government, where the Conservatives, lost control of the public finances: inflation and interest rates went through the roof.”
The Chancellor also took aim at Brexit, saying the impact of leaving the EU is “severe and long-lasting.”
She added: “Austerity, Brexit, and the ongoing impact of Liz Truss’s mini-budget, all of those things have weighed heavily on the UK economy.
“Already, people thought that the UK economy would be four per cent smaller because of Brexit.
“Now, of course, we are undoing some of that damage by the deal that we did with the EU earlier this year on food and farming, goods moving between us and the continent, on energy and electricity trading, on an ambitious youth mobility scheme, but there is no doubting that the impact of Brexit is severe and long-lasting.”
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