Rachel Reeves is set to issue a fresh tax warning this morning, amid growing speculation she is preparing to tear up Labours manifesto by hiking income tax.
In a highly unusual move, the Chancellor will use an early morning speech in Downing Street to address speculation about the contents of her November 26 Budget - when she is expected to raise taxes by up to £30billion.
She is expected to warn that the public finances are in a worse state than previously admitted.
Despite the parlous state of the economy, Ms Reeves will rule out spending restraint, arguing that further investment is needed to boost the economy and prop up public services.