Reeves said in her March spring statement that her spending and tax plans would leave a £9.9 billion (US$13 billion) fiscal buffer against her main target of balancing day-to-day public spending with tax revenues by 2030.

Since then the government’s borrowing costs have risen by more than expected, a plan to save £5 billion a year in welfare costs has been dropped and Britain’s budget watchdog has suggested it will lower its growth forecasts.

Economic think tanks now expect Reeves to need to raise about £30 billion in tax increases at the Nov 26 budget.

Today, the Telegraph cited Treasury sources as saying Reeves also now planned to build up a bigger buffer to better protect government finances from volatility in the bond markets and rising borrowing costs.

That raises the prospect that she will need to raise more in taxes or cut spending to establish a larger buffer.

Reeves last year raised taxes by £40 billion, something she said she would not repeat.

Any move to increase the buffer could be welcomed by economists and think tanks which have warned that the tight margin risks speculation of tax rises or spending cuts when the fiscal rules are assessed twice a year, weighing on the economy.

A spokesman for the Treasury, asked about the potential for a higher buffer, said Reeves’ fiscal rules helped to keep interest rates low while prioritising investment to support long-term growth.

“This is the responsible choice – to reduce our levels of borrowing in the years ahead, so we can spend more on our public services, more on the priorities of working people and less on servicing debt,” the spokesman said.