Rachel Reeves is facing a looming fiscal crisis that could trigger a wave of tax rises this autumn. The beleaguered Chancellor, who was seen crying at Prime Minister’s Questions today, has no choice but to make multiple tax rises according to an explosive report.

The Chancellor is grappling with a black hole in the public finances of between £18 billion and £32 billion, raising the spectre of six major tax increases.

The warning comes as Reeves prepares her second Budget amid worsening economic conditions, spiralling borrowing costs, and a dramatic reversal of key Labour welfare pledges.

Sanjay Raja, Senior Economist at Deutsche Bank, said the fiscal timebomb is being driven by several factors, including rising debt interest payments, policy u-turns on benefits and pension, lower tax receipts from energy firms and the impact of US tariffs.

According to Deutsche Bank’s modelling, the combined impact of these pressures could leave Reeves needing to find between £18 billion and £32 billion to keep within her own fiscal rules.

It believes the most likely response is a raft of new tax rises, many of which will land squarely on middle-income households and pensioners.

Six tax hikes now being considered:

• Pension tax-free lump sum cut – Reducing the tax-free allowance from £268,000 to £100,000 could raise £2bn a year.
• Inheritance tax on pensions – Scrapping exemptions could bring in a further £2bn annually.
• Gambling tax overhaul – Taxing winnings or tweaking betting duties could net £1bn to £3bn.
• Bank levy hike – Restoring the levy to 8% could raise £1.5bn.
• Council tax reform – A 2-point hike in annual rises and revaluation of bands could generate £1bn or more.
• Fiscal drag extension – Freezing tax thresholds for longer, perhaps through to 2030, would silently boost Treasury receipts by £7bn.

And that’s just for starters. Mr Raja added: “Aside from slight tweaks to spending assumptions, tax rises will likely have to bear much of the burden when it comes to fiscal consolidation in the autumn.”

Deutsche Bank also warns that if the deficit breaches £20 billion, Labour could be forced to abandon its General Election pledge not to raise income tax, VAT or employee National Insurance.

In that scenario, the most likely target would be a reversal of the recent 5p National Insurance cut. That alone could raise close to £20 billion, and would likely be sold politically as undoing a “pre-election giveaway” by the former Conservative government.

Reeves’ problems have been compounded by a string of expensive policy reversals since taking office, including:

• U-turn on winter fuel payments – Costing £1.25bn
• Backtrack on welfare reforms – Another £5bn
• Plans to scrap the two-child benefit cap – Adding £3.2bn

In total, Deutsche Bank estimates these U-turns alone could add £9.5bn to government borrowing.

There is some limited scope for savings, such as freezing public spending after 2029 or boosting growth through deregulation and trade deals with India and the EU. But Mr Raja warns these alone won’t be enough.

“Spending cuts have likely reached their political limits,” he said. “Put simply, Chancellor Reeves will likely see little room to engineer further spending cuts given the pushback seen around winter fuel allowances and welfare benefit cuts.”

The Government is saying nothing on the risk of possible tax rises. Tory leader Kemi Badenoch asked Sir Keir Starmer to rule out tax rises in the autumn Budget.

Starmer only said in response that no Prime Minister or Chancellor stands at the dispatch box and predicts a future Budget.