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

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 warml

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