‘There will be consequences’: budget may mean smaller pay rises, says Reeves

Rachel Reeves said she had decided the right thing to do was to ask businesses and the wealthiest to pay a bit more. Photograph: Xinhua/Rex/Shutterstock

The budget is likely to mean smaller pay rises for workers because of the impact on businesses, Rachel Reeves has conceded.

The chancellor said she recognised “there will be consequences” to her first budget, which includes £40bn in tax rises, more than half of which come from increasing tax on businesses.