As the October 30 Budget looms, Rob Wood, chief UK economist at Pantheon Macroeconomics, stressed that Ms Reeves will need to spend more than the one per cent year-over-year real public spending increases which had been pencilled in by her predecessor Jeremy Hunt.

Rachel Reeves is considering increasing alcohol duties in next month’s Budget.The Chancellor has not ruled out putting up tax on beer, wine and spirits as part of efforts to plug what Labour claims is a £22 billion hole in the public finances.

Some economists have linked the drop to officials' warnings of a "painful" Budget at the end of August, although it is impossible to prove a link. There were "major corrections" - or double digit falls - for consumers' perception of the general economic situation,

Rachel Reeves is under pressure to re-think the winter fuel allowance cut after the Bank of England threw the Chancellor a lifeline.

Chancellor Rachel Reeves is still expected to press ahead with her plan to cut the winter fuel payment for millions of pensioners despite being handed a £10 billion budget boost by the Bank of England.

Sir Keir Starmer, alongside the Chancellor Rachel Reeves and his deputy PM Angela Rayner, made the bombshell announcement on Friday evening.