Chancellor Rachel Reeves used a Labour conference in Liverpool to warn of harsh global headwinds and to signal that further tax rises could be needed in the Budget. She pledged to keep control of public finances and to not take risks with the trust placed in the British people.

Reeves said the world has changed since she last spoke to business chiefs about not repeating the tax rise from her first Budget. In an interview on BBC Radio 4’s Today programme, she argued that wars in Europe and the Middle East, new barriers to trade and higher borrowing costs show why economic stability matters. Experts from the National Institute of Economic and Social Research estimate the budget hole could be as large as £50 billion.

Her speech set out policy proposals, including a youth guarantee offering paid work to young people who have spent 18 months not in employment, education or training; plans for Northern Powerhouse Rail; a library in every English primary school; and an ambitious agreement with the European Union on youth mobility to maximise opportunities. In the background, Labour trails Reform UK in the polls, with some MPs said to have urged Keir Starmer to challenge him, and Greater Manchester mayor Andy Burnham arguing the party must reduce reliance on the bond markets. A pro-Palestinian heckler interrupted Reeves; she told him, ‘We understand your cause’, but added that Labour is now a government, not a party of protest. Later, the PM’s Chief Secretary to the Treasury, Darren Jones, said the manifesto stands and that budget decisions will be announced to Parliament in the normal way.