The chancellor has vowed to "defy" gloomy forecasts for the UK economy after it emerged the government is facing a bigger-than-expected hole in the public finances.

The BBC understands the official forecaster, the Office for Budget Responsibility (OBR), is set to downgrade the UK's productivity performance - a measure of the output of the economy per hour worked.

The change to the key measure could lead to the chancellor facing a £20bn gap in meeting her tax and spending rules, adding to expectations taxes will be hiked at the Budget next month.

Rachel Reeves said she would not "pre-empt" any downgrade by the OBR, but was "determined that we don't simply accept the forecasts but we defy them".

The chancellor addressed the emergence of a the UK's productivity being downgraded for the first time when writing in the Guardian newspaper on Tuesday.