It added that the Chancellor must now decide how to divide the pressure between higher taxes, lower spending and declining public services.
Over the weekend, the Government also closed the door on extending the so-called “mansion tax” to properties worth £1.5million and abandoned a proposed levy on warehouses after opposition from Tesco and John Lewis.
Those decisions have left ministers under growing pressure to target wealth, particularly through capital gains tax. But Ms Miller cautioned that narrowing the tax base carries its own dangers.
“The risk of having taken the big taxes off the table is that you end up fiddling with smaller, more damaging taxes and therefore doing more damage than you would need to do,” she said.
Ahead of his trip to Bangkok this week for the International Monetary Fund’s annual meeting, Mr Healey pledged to show “fiscal discipline” in his October 28 Budget, signalling he would not resort to higher borrowing to fill the funding gap. “This means breathing space for today and hope for the future,” he said.
Andrew Bailey, the Bank of England governor, warned last week that Britain could face a repeat of the Liz Truss mini-Budget crisis if the Government failed to convince financial markets that its fiscal plans were sound.