Households are braced for more council tax pain after Rachel Reeves signalled maximum rises over the next three years.

As part of the Chancellor's spending plans, the Treasury suggested that local authorities would hike bills by 4.99 per cent a year for the rest of this Parliament.

This is the maximum hike allowed, in normal circumstances, before councils are required to hold a local referendum.

The 4.99 per cent cap is made up of 2.99 per cent for general spending and a 2 per cent adult social care precept.

Ms Reeves said Labour would not be 'going above' the 4.99 per cent cap, but did not deny her spending review - announced yesterday - is based on maximum rises.