Anyone earning £45,000 or more per year is being warned they could face a major squeeze in the upcoming Budget next month.

Rachel Reeves has already admitted she is looking at tax increases to balance the books and plug the ever growing financial black hole at the heart of the nation’s finances, and now the scope of those expected to pay for it has been revealed.

In its manifesto, Labour promised not to raise taxes on ‘working people’. But according to reports by Sky News, the government has now agreed upon a definition of working people which means anyone earning just £45,000 or more.

As a result, it means those earning £46,000 and above could face tax hikes in the Budget announcements on November 26.

Based on the £45k definition, it means that increases in the basic rate of income tax (paid by those earning £12,570 to £50,270) are unlikely, as are increases in National Insurance.

But it could, for example, mean a rise to the higher rate, currently set at 40% of earnings above £50,270.

The Office for Budget Responsibility (OBR) is expected to deal the Chancellor a further blow in November by downgrading its productivity forecasts for the British economy, leaving her trying to fill a gap in her plans of more than £20 billion.

Ms Reeves is widely expected to raise taxes at the Budget next month thanks to a combination of higher borrowing costs, more persistent inflation and weak growth.

Partially reversing the winter fuel allowance cut, the U-turn on cutting welfare spending and the expected end of the two-child benefit cap have also added to her need to find more cash.

In an article in the Guardian, Ms Reeves appeared to rule out significant spending cuts, vowing there would be “no return to austerity”.

She said: “If productivity is our challenge, then investment is our solution.

“These decisions – and the decisions I will take at the Budget – don’t come for free and they are not easy, but they are the right, fair and necessary choices.”