Reeves warned she'll have to make tax hikes to fill £50b black hole

Rachel Reeves will have to increase taxes substantially this autumn to fill a £50billion black hole, economists warned last night.

In a dire warning, the National Institute of Economic and Social Research said the Chancellor would have to find the equivalent of adding 5p to income tax to keep afloat by the end of the decade and meet her fiscal rules.

Research by the respected think-tank found that the 'wafer thin' headroom of £9.9billion Ms Reeves left herself last year has been wiped out, and there is now a budget deficit of £41.2billion.

To fill the hole and maintain the buffer, she will have to find £51billion annually in higher taxes or lower spending by 2029/30.

Despite announcing tax rises worth £40billion in last year's Budget, Ms Reeves has repeatedly refused to rule out a fresh raid this autumn. Labour's lack of an economic plan on entering government was also criticised.