Reeves tells budget watchdog she will hike income tax despite Labour promises
The forecaster has reportedly received confirmation that the Chancellor will break Labour's manifesto pledge
Rachel Reeves has told the Office of Budget Responsibility (OBR) she will hike income tax at the Budget - seemingly confirming reports that Labour will break its manifesto pledge not to do so.
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The Chancellor is preparing to give a difficult Budget on November 26 with pressure on her to fill a hole in Britain's finances.
The forecaster has been told by the Treasury that a rise in personal taxation is one of the "major measures" being planned in the fiscal event.
The plans would break with Labour's headline manifesto pledge: not to increase income tax, VAT or national insurance.
According to The Times, the OBR has also been provided with Reeves's plan to increase economic growth.
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It will now assess the impact of the planned measures and will inform the Treasury of its assessment on Monday before a final round of forecasts shortly before the Budget.
Reports have suggest for weeks that Reeves was planning to use an income tax hike to balance the books.
Some have suggested she may use a simultaneous equal cut in national insurance to protect most workers - while hauling in more revenues from pensioners and landlords.
On Tuesday, the Chancellor told LBC that the UK economy a "mess", and has "been through the mill" in recent years.
Speaking on Tonight with Andrew Marr, the Chancellor was asked if resigning would be the "honourable" thing to do should she resort to such hiking tax.
But instead, Reeves stood firm and said: "I am not going to walk away because the situation is difficult.
"I was appointed as Chancellor to turn our economy around, and I'm absolutely determined to finish that job.
"What do you think would happen in financial markets if I (resigned)?"
"It depends who took over, I guess," Andrew retorted, explaining that the easy option would be to "massage the figures" and echo previous Chancellors.
Ms Reeves fired back: "I have been able to build a reputation and have been trusted with the public finances.
"I've steered our economy through some challenging times the last 15 months, increases in global tariffs, increases in volatility, increased tensions around the world, and yet our bond yields are lower than they were a few months ago, and have outperformed our peers.
"The FTSE is close to record highs. Our economy in the first half of this year was the strongest growing in the G7. So, I am not going to walk away because the situation is difficult.
"I was appointed as Chancellor to turn our economy around, and I'm absolutely determined to finish that job."
Ms Reeves also refused on four occasions to answer whether she would look to raise income tax in the forthcoming Budget.
"My number one priority is to grow the economy," she insisted, adding there will be no change to the triple lock.
It comes as the Chancellor put the country on notice on Tuesday over tax rises in her Budget, insisting “each of us must do our bit”.
Refusing to recommit to Labour’s manifesto commitments not to raise income tax during her speech on Tuesday, national insurance or VAT, saying “we will all have to contribute”.