Reeves expected to reveal cut in growth forecasts for next five years in budget | Economic growth (GDP)

Rachel Reeves is expected to announce in this week’s budget that Britain’s economic growth forecasts have been cut for the next five years, despite efforts to boost production.

The Office for Budget Responsibility (OBR) has reportedly lowered its forecast for the UK’s growth each year to 2030-31 as part of a pre-budget review that will argue that a lack of investment under Conservative administrations has undermined the UK’s potential economic expansion.

The Chancellor’s efforts to boost growth will not offset the OBR’s annual downgrades. Sky News reportedIt undermines Labour’s chances at the next election in 2029.

The Treasury refused to comment on the leak. A spokesman said: “We know there’s more to do. That’s why we’re investing £120bn more in national infrastructure than the previous government, cutting red tape and unnecessary regulations for businesses, introducing a new planning bill and delivering new trade deals around the world.”

Reeves has already acknowledged publicly that growth forecasts will take a hit as the OBR reviews productivity assumptions that measure a worker’s output per hour.

A downgrade was understood to be likely after the independent forecaster’s senior executives (including its chairman, Richard Hughes) agreed that previous growth rates were overly optimistic. A downgrade could cut between £10 billion and £20 billion from future tax revenues each year.

Reeves struggled to convince the OBR that measures in his first two budgets would turn the situation around and improve growth and enable more generous deals closer to the election.

Treasury officials are likely to be concerned that the OBR believes the economic outlook remains weak despite the extra investment.

In his quest for extra tax, Reeves could hit more than 100,000 high-value properties with a levy on those worth more than £2 million, raising £400 million to £450 million, the Times reported.

It is also expected to freeze income tax thresholds for another two years, until 2030; This could push more people into higher tax brackets as wages rise.

Other tax-raising measures are expected to include a pay-per-mile scheme for electric cars, starting to fill the gap left by the petrol tax as more people switch to electric vehicles, and measures to make salary sacrifice schemes, including pension contributions, less generous.

The chancellor is also expected to lift the two-child limit on universal credit and the government has announced a freeze on rail fares and prescription charges in a bid to ease the life crisis.