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Tax hikes at the upcoming Budget are "inevitable", according to a think tank closely associated with Labour. The Resolution Foundation says increases could be implemented in a way that "boosts confidence in the economy and the public finances, while also reducing child poverty and the cost of living."

The foundation's pre-Budget preview recommends that Chancellor Rachel Reeves must double her fiscal headroom in the November 26 statement to the Commons. This would increase the buffer against unexpected economic changes to £20 billion, although the think tank concedes a rise of £15 billion might be more feasible.

"This would send a clear message to markets that she is serious about fixing the public finances, which in turn should reduce medium-term borrowing costs and make fu

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