Benefits are on track to be hiked by around 4 per cent next year – lower than the increase in the state pension – due to higher than expected inflation.

The Treasury expects official figures will confirm September’s rate of inflation will rise from 3.8 per cent to 4 per cent – the highest since January last year – in figures released on Wednesday.

The figures, which could cause higher government spending than planned, put even more pressure on Chancellor Rachel Reeves ahead of her Budget next month. New Feature

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It comes after Government borrowing in September hit the highest level for five years at £99.8bn between April and September – £7.2bn more than forecast, and £11.5bn higher than the same period in 2024.

The Chancellor is

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