Why Reeves’s runaway public sector wages mean we’re headed for even higher taxes

However, we have yet to see how Donald Trump might influence interest rates. His return to the White House is expected to lead to a significant increase in debt worldwide, which could also increase borrowing costs in financial markets.

Matt Swannell, chief economic adviser at the EY Item Club, says recent changes in the bond market are already tightening Reeves’ room for maneuver.

“The Chancellor has left herself little wiggle room over her own budget rules and may have to push through bigger tax rises in future years if tax collections disappoint or spending is higher,” he says.

“Indeed, if the rise in market interest rates continues after the Budget, the government will be less able to achieve its fiscal targets.”

The October figures mean Britain has borrowed £96.6 billion to pay for public services this year – £1.1 billion more than the same period last year.

The OBR blamed the extra borrowing on “higher central government spending, particularly departmental consumption and welfare spending”. And the ONS said the previous government’s decision to increase the range of benefits by 6.7% and the state pension by 8.5% last year meant social security payments increased by £7.2bn to £178.4bn in this financial year.

The ONS also highlighted that strong tax revenues helped offset rising government spending.

October saw significant growth in income and corporate tax receipts. Total debt stood at 97.5% of GDP in October, while the chancellor’s preferred measure, which excludes the student loan portfolio and other investment debts, was estimated at 83.7% of GDP at the end of October.

Darren Jones, chief secretary to the Treasury, insisted the government was putting “the public finances on a sustainable footing for the country’s recovery”.

He added: “This government will never act quickly and carelessly with public finances. Our new robust fiscal rules will provide stability by reducing debt while prioritizing investment to drive growth.”