Rachel Reeves lit the fuse of another tax bombshell as Britons were put on notice for more painful hikes. The Chancellor all but revealed she will have no choice but to act to fill a £50billion black hole in public finance when she delivers her highly-anticipated pre-Christmas Budget.

She complained that “harsh global headwinds” made “harder choices” on taxes and spending inevitable. Ms Reeves laid the groundwork for a brutal raid in just 10 weeks as she addressed Labour supporters at the party’s annual conference in Liverpool.

She said: “In the months ahead, we will face further tests, with the choices to come made all the harder by harsh global headwinds, and the long-term damage done to our country, which is becoming ever clearer.”

Experts have said Ms Reeves will have to increase taxes or cut spending to fill the colossal shortfall in her budget, which the National Institute of Economic and Social Research has estimated could be as much as £50 billion.

The Chancellor said she would “not take risks with Britain’s economic stability”, adding: “I will make my choices at that budget. They will be choices to take our country forward.

“And whatever tests come our way, whatever tests come my way, I make this commitment to you: I will take no risks with the trust placed in us by the British people.”

Ms Reeves also refused to categorically rule out hiking VAT on November 26. In a further grim hint, No10 enforcer Darren Jones said Labour’s manifesto promises not to increase income tax, national insurance or VAT only stood “today” because decisions have not been taken ahead of the Budget.

“I am not ruling anything out, or anything in. All I’m saying is today the manifesto stands,” he told Sky News.

“We’ve got a budget process to go through, and any decisions will be announced to Parliament in the normal way,” the Prime Minister’s Chief Secretary said.

The Conservatives said millions of families should brace themselves for a punishing tax raid.

Shadow Chancellor, Sir Mel Stride, said: “Rachel Reeves says she won’t risk the public finances, but she’s already doing that – with more borrowing, higher spending, and more taxes.

“Labour has raised taxes by £40 billion per year, including a £25 billion tax on jobs, and now won’t rule out coming back for more.”

He added: “Labour spends more, taxes more, and blames others when things go wrong. Under them, nothing is safe – not your job, savings, or pension.”

In her speech Ms Reeves confirmed plans for a youth guarantee, offering paid work to young people who had spent 18 months not in employment, education or training.

She said the Government would “push ahead with our plans for Northern Powerhouse Rail” linking towns and cities across northern England.

And the Chancellor announced plans for a library in every English primary school. But she set alarm bells ringing by targeting a deal with the European Union for an “ambitious agreement on youth mobility” to help secure “the maximum economic and cultural opportunities”.

John O’Connell, chief executive of the TaxPayers’ Alliance, slammed the speech for being hollow and failing to address mounting problems faced by small businesses and farmers.

“Rachel Reeves wanted her speech to sound bold and bullish, but it came across as hollow, hopelessly out of touch, and ignorant of the damage her policies are causing for small businesses, family farmers and ordinary taxpayers alike,” he said.

“Under her watch, the economy is stuck in a doom loop. Reeves dresses this up as stability, but in reality she is overseeing a system that is punishing work, investment and aspiration while pouring money into a bloated state that delivers less and less.

“The chancellor must rule out further tax hikes, end her reckless borrowing binge, and set out a serious plan to get spending under control. Anything less will condemn Britain to stay on the path of stagnation and long-term decline.”

Tom Clougherty, Executive Director at the Institute of Economic Affairs said the Chancellor’s plans for growth “leave much to be desired”.

“For all of the positive words about growth there is very little substance that gives us cause for optimism, despite it rightly being their number one priority,” he said.

With Labour trailing Reform UK in the polls, Sir Keir Starmer’s leadership has been questioned, with Greater Manchester mayor Andy Burnham claiming he had been urged by some MPs to challenge him.

Mr Burnham has suggested the UK has “got to get beyond this thing of being in hock to the bond markets” as he set out plans for billions more borrowing. But Ms Reeves took a thinly-veiled swipe at his economic approach, warning of the dangers of unrestrained borrowing.

She said: “There are still those who peddle the idea that we could just abandon economic responsibility and cast off any constraints on spending. They are wrong – dangerously so.”

Ms Reeves also used large chunks of her speech to make jabs at Nigel Farage. She accused the Reform leader of being “in bed with Vladimir Putin” and the “single greatest threat” to the livelihoods of Britons.