Chancellor John Healey is poised to deliver his first Budget on Wednesday, amid fevered speculation surrounding potential tax rises or spending cuts to fill a growing black hole in the public finances.

The Budget is one of the biggest events in the UK's political and economic calendar, when the chancellor sets out the government's plans for taxation, public spending and the wider economy. Delivered in a speech to MPs in the House of Commons, the Budget outlines how the government intends to raise and spend money.

Former defence secretary Mr Healey is under pressure to raise taxes or find billions of savings to help ramp up Britain’s military spending , whilst also ensuring the string of pledges set out by the prime minister during his first weeks in office are fully funded.

Meanwhile, soaring borrowing costs because of the Iran war and weaker growth has wiped nearly billions off the government's fiscal headroom.

UK government borrowing rose by more than expected to £24.5 billion for last month,…