Fall 2022 budget forecast, from state pension to income tax - how it hits you

Tens of millions of Britons are facing 'tempting' tax hikes and spending cuts to fill a black hole of up to £50bn left by Liz Truss who brought down the economy.

The autumn statement - which does not have the status of a budget, but is similar - will be announced on November 17 by new Chancellor Jeremy Hunt.

He is set to announce a mix of tax hikes and public spending cuts, despite services creaking after a decade of austerity. And the state pension or benefits could face a reduction in real terms.

It is understood the Prime Minister plans to cut £33bn from services by 2027/28 and raise £21bn in tax.

It comes after the Bank of England raised the base interest rate to 3% in the biggest hike in decades, making people's mortgages hundreds of pounds a month higher dear.

He warned the UK was heading for the longest recession in 100 years, with a "very tough" two-year recession ahead.

Weeks after Ms Truss' bid for tax cuts fell through, a Treasury source said: 'It's going to be tough.

"The truth is that everyone will have to contribute more in taxes if we want to maintain public services."

Rishi Sunak is planning big cuts in public services (

Picture:

Anadolu Agency via Getty Images)

The Resolution Foundation has warned that half a million more people will be out of work next year - with a £40billion black hole if the Tories want to 'balance the books' after markets exploded following to Mrs. Truss' borrowing spree.

But the Conservatives' pledge to borrow less than they raise in taxes has already been pushed back a decade to the mid-2020s and could be delayed further.

Critics say many of the warnings - like the £50bn - are 'expectation management' and that, moreover, now is not the time for sweeping budget cuts.

Here's what to expect so far.

Stealth hike in income tax and national insurance

The threshold at which you start paying 20p income tax and 12p national insurance - £12,570 - is already frozen for four years until April 2026.

Now the Chancellor is drawing up plans to freeze it for another two years, until April 2028.

It would also freeze the £50,270 threshold at which you start paying 40p in income tax.

This massive stealth tax hike will bring the treasury £4 billion a year, pushing millions more into higher tax brackets as wages rise with inflation.

The four-year freeze was already expected to affect 27.1 million base rate taxpayers, with an average loss in real terms of £196 a year.

Some 4.3 million higher rate taxpayers were expected to lose £734 a year, while 591,000 additional rate taxpayers lost an average of £324 in real terms.

And those numbers grossly underestimate the impact. They were developed...