Rachel Reeves has backed down from plans to increase income tax in her Budget this month.

Speculation had been mounting that Reeves had prepared the country for a hike in what would have likely been a breach of Labour’s manifesto pledge to not raise taxes on ‘working people’.

Officials were drafting up plans to hike income tax by as much as 2p, alongside a simultaneous drop in national insurance contributions for those earning up to £50,000 annually.

Last week the Chancellor used a press conference to appear to pave the way for difficult choices in the upcoming fiscal event.

She added that everyone would need to ‘play their part’ in helping to turn the country’s finances around.

The Financial Times reported however that the Government indicated it would no go ahead with the income tax

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