Rachel Reeves has signalled that more tax rises are on the way, saying she understands why people are angry about the state of the economy but arguing that difficult decisions are needed to restore stability.
Ahead of the Budget later on Wednesday, the Chancellor said the Government had begun to make progress, pointing to faster wage growth, shorter hospital waiting lists and a stronger-than-expected economy, but admitted that pressures on household finances remain severe.
Reeves is expected to extend the freeze on personal tax thresholds, a move that would pull almost one million extra people into paying income tax and raise billions by the end of the decade.
The Chancellor has promised to steer clear of austerity while avoiding heavy borrowing, arguing she must strengthen the public finances and build resilience against future shocks.
She is expected to confirm the scrapping of the two-child benefit cap and to maintain the freeze on fuel duty. Reeves said she would take “fair and necessary choices” to deliver long-term growth, but critics accused her of breaking earlier promises not to return for further tax increases.