Chancellor is set to borrow an extra £70bn to cover soaring debt interest and welfare bills in Wednesday's Budget

John Healey's fiscal buffer has fallen to around £12bn, about half the headroom Rachel Reeves left him. National debt topped £3 trillion last month, with the monthly interest bill hitting a record £10.9bn. Deutsche Bank economist Sanjay Raja says the extra borrowing will 'almost certainly' swell debt by 2031-32. Big decisions on defence, benefits and social care are likely to be pushed back.

Banks and gambling firms are expected to be hit with higher taxes instead.

Healey has vowed to cut VAT on electricity bills and freeze fuel duty.

Chancellors target borrowing of 1.1% of GDP but average 4.8%, the IFS found.