Her comments have been widely interpreted as paving the way for possible tax rises – or at the very least extending the stealth tax of frozen thresholds, which already drags millions into higher tax brackets.

With the Autumn Budget due on November 26, the Chancellor faces a dilemma familiar to her predecessors.

Under normal circumstances, a government needing to increase revenues turns to one of the key taxes we pay and hikes it. Individually, such rises can be modest, but collectively they deliver significant income to Whitehall.

Yet the Labour Party’s pre-election manifesto stated it “will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of income tax, or VAT [value added tax on goods and services]”.

That pledge now appears to be under strain. Even if the main rates remain unchanged, keeping tax bands frozen could still see millions pay more in what amounts to a stealth tax by inflation.

While it may sound good in principle, the policy means that as prices rise and wages increase, more of your income is pulled into taxable territory.

Currently, every penny you earn up to £12,570 is income-tax free – it’s known as your personal allowance.

The basic tax rate of 20% is charged on any income between the base level and £50,270, with anything above that taxed at 40%. But as your salary grows, more of it becomes taxable, and an increasing number of people are being dragged into the higher-rate bracket even though their real-terms spending power has barely changed.

This creates what is known as ‘fiscal drag’.

In short, more and more of us will find wage rises, while good in themselves, mean even better news for the Treasury without it doing a thing.

Sam Finch, director at chartered accountants and advisors Spurling Cannon, which has offices in Ramsgate and Charing, explains: “From our point of view, what we're seeing a lot of discussion around is what we call stealth taxes - the freezing of the personal allowance, the freezing of the basic rate band.”

Those tax bands have been fixed at those levels since Rishi Sunak - then Chancellor - announced a freeze, under Boris Johnson’s tenure at Number 10, in April 2022. They were frozen further by the Conservative administration until 2028. Freezing them for a further two years could net the Treasury £6 billion, according to the National Institute of Economic and Social Research.

Had they changed in line with inflation, according to investment platform AJ Bell, the personal allowance would have increased to more than £15,500 this year and the higher tax band to £62,000 – keeping more money in your pocket and out of Treasury coffers.

As background, the government takes in about £1 trillion a year. Income tax accounts - according to the independent Institute for Fiscal Studies (IFS) - for around 28% of all government income for the 2023/24 financial year. National Insurance accounts for 18%, and VAT 17%.

So, adding 1p to the basic-rate income tax (effectively lifting it from 20% to 21% - so paying 21p for every pound earned above the basic rate instead of 20p) would generate around £6.9 billion in the first year alone.

For example, if you earn £35,000, such a hike would cost you about £224 a year - between £18-19 a month.

Any such move, though, would spark a major backlash given the manifesto commitments – but after Reeves’s speech, few observers believe it can be ruled out.

The recent downgrade in the UK’s productivity outlook suggests she will need to find a further £20 billion, and tax rises remain the surest way to do it.

However, any such move - given their promises - would also spark a huge backlash from opponents who would, understandably, use it to hammer the government for the rest of its term. But don’t rule it out. The recent downgrade in the UK’s productivity suggests she will need to find a further £20bn. Hiking our taxes could deliver that.

Pensions, on the other hand, may be a rather different matter.

One of the most recurring pieces of speculation surrounds changes to the lump-sum payment you can take from your pension pot.

Currently, from the age of 55, you can - in most cases - withdraw up to 25% of your private pension fund tax-free. It’s often used to pay off mortgages or settle outstanding debts before the inevitable reduction in income as you enter your retirement years.

For most people, the maximum tax-free lump sum is set at £268,275 - what’s known as your lump sum allowance (LSA),

But there is much talk of that figure being reduced - which will hit only those with the most sizeable pension pots - or the percentage you can withdraw reduced. Down, say, to 20%. Which would impact everyone entering that era of their lives.

While there are obvious benefits to the Treasury (it means more of your pension is then liable for tax), it has prompted a flurry of withdrawals ahead of the anticipated changes, and taking such a large chunk at the start of drawing from your pot may not be for everyone.

Currently, the state pension is a fraction more than £11,500 a year - so as it’s under the basic rate of income tax, it escapes deductions.

However, if you’re drawing a private pension too - which more and more of us are or will be - then if that knocks you over the basic tax allowance, you are subject to income tax on anything over £12,570.

Key to consider, too, is that if you take out the full tax-free lump sum and then live longer than you perhaps expected, your private pension fund could be emptied earlier than you thought.

The overriding advice is - if in doubt, seek out an independent financial advisor who can explain the pros and cons for you and your personal circumstances.

As ever, with a Labour government, there is the possibility it looks to impose some form of wealth tax - targeting the richest in society.

A wealth tax is, in short, an annual levy imposed on someone’s total net assets - taking into account property, investments, cash at the bank and even valuable items such as art or antiques - above a certain figure. One doesn’t currently exist in the UK’s complicated tax tapestry

For example, this could be imposed on those with assets in excess of £10 million. So not impacting many of us, but potentially a political move to appease those on the left of the party. It carries risks, however, to the wider economy.

The Institute of Fiscal Studies is not a fan of any such move. It says: “We caution against introducing an annual wealth tax, which would face huge practical challenges.

“It would also penalise saving and, the more it was concentrated on the very wealthy, the more it would incentivise them to leave - or not come to - the UK. It would not be a well-targeted way to tax the large returns that wealth can generate and, as such, would be no substitute for well-functioning taxes on capital income and gains.

“If the Chancellor wants to raise more from the better-off, a better approach would be to fix existing wealth-related taxes.”

They include the likes of Capital Gains Tax - a tax on the profit you make when disposing of items which have subsequently increased in value. These do not include cars or your primary property - but do apply to second homes, for example (which carries a hefty 25% charge).

Anything under the value of £6,000 is not included.

But hiking the rates could deter investing and saving. Another tricky balancing act for the Chancellor - among so many more.

There’s also talk of a revision of council tax - the ever-rising bill we pay through our local authorities each year. Currently, the bands are based on property valuations in 1991.

Property website Zoopla explains: “While the underlying valuations for council tax are out of date, most properties in an area increase in value by the same proportion in the long run.

“A revaluation would tidy up the system, but we question how effective it would be in raising enough tax - unless the government took the opportunity to add new bands to unlock more revenues for local government. This would again impact those with expensive properties or in higher-value areas the most.”

Motorists could also be hit. Fuel duty has been frozen since 2011, and the 5p-per-litre cut from 2022 remains in place until March 2026. But with fuel prices steady, Rachel Reeves might decide it’s time for a small rise – maybe 1p or 2p per litre. Politically unpopular, but an option.

So, while the Chancellor insists she is acting out of fairness and fiscal responsibility, her refusal to rule out tax increases has left millions uncertain about what comes next.

Even if income tax, National Insurance and VAT rates are untouched, the combination of frozen thresholds, rising bills and the cost of living means it’s likely few households will escape unscathed when the Budget is unveiled later this month.