'Britain's economy isn't broken,' Rachel Reeves insists as she announces Budget date amid tax hike fears

The Chancellor is expected to raise taxes and tighten spending across Whitehall as she tries to balance the books.

In a video message this morning, Ms Reeves defended her handling of UK plc but acknowledged people were suffering.

She said: "Britain's economy isn't broken. But I know it's not working well enough for working people.

"Bills are high. Getting ahead feels tougher. You put more in, get less out. That has to change."

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She listed a number of Labour's achievements in 'fixing the foundations', including raising the minimum wage and securing a number of trade deals with other nations, before highlighting that "cost of living pressures are still real."

She added: "And we must bring inflation and borrowing costs down by keeping a tight grip on day-to-day spending through our non-negotiable fiscal rules. It's only by doing this can we afford to do the things we want to do.

"If renewal is our mission and growth is our challenge. Investment and reform are our tools. The tools to building an economy that works for you - and rewards you. More pounds in your pocket. An NHS there when you need it. Opportunity for all.

"Those are my priorities. The priorities of the British people. And it is what I am determined to deliver."

The budget is expected to be a make or break moment for the Chancellor as the economy still isn't where Labour would have liked it to be, with weak growth and a rising cost of living mounting pressure on Number 10.

Yesterday, turmoil struck as borrowing costs hit their record mark, making it more costly for the government to borrow from the financial markets.

It also saw sterling fall sharply against the dollar in its biggest one-day drop since April.

Downing Street has insisting Reeves' authority wasn't dented after the Prime Minister announced a shake-up of his Cabinet.

This week’s reshuffle saw the Chancellor’s deputy, Darren Jones, move into a new role as chief secretary to the Prime Minister.

Sir Keir Starmer also brought in Baroness Minouche Shafik, a former Bank of England deputy governor, as his chief economic adviser, and senior Treasury mandarin Dan York-Smith as his principal private secretary.

The addition of the economic advisers to the Prime Minister's top team has been seen as a sign the government is getting prepared for a tricky budget - while some have suggested their appointment undermines Rachel Reeves' authority.

Economies across the world are feeling lasting pressures in the wake of the Covid-19 pandemic, Russia's ongoing war on Ukraine and, more recently, Donald Trump's aggressive tariff policy.

But the UK is facing particular home-grown challenges ahead of the autumn budget, with concerns that Ms Reeves will be forced to hike taxes and slash spending to balance the books.

Either of those decisions will be difficult to deliver politically as Brits struggle with the still-spiralling cost of living.

In the Spring Statement in March, Reeves said state finances were on track to restore a £9.9 billion budget surplus by 2029/30.

But experts at the National Institute of Economic and Social Research (Niesr), have predicted a shortfall of £62.9 billion over this time frame, suggesting the Treasury could need to look at more spending cuts or tax increases to achieve a surplus.

The Chancellor hasn't made life easy for herself by setting out a number of fiscal rules last October, restricting her abilities to raise taxes or increase borrowing.

One is the "stability rule", which ensures that day-to-day spending is matched by tax revenues so the Government only borrows to invest.

The second is the "investment rule", which requires the Government to reduce net financial debt as a share of the economy.