Anthony Albanese has ruled out major cuts to health, education and essential services in December’s mid-year budget update, but conceded savings are required as Labor struggles to curb accelerating inflation.

Amid growing pressure from within Labor’s own ranks, as well as from the opposition and business, Albanese said the Coalition was hypocritical in not supporting existing savings proposals, including the government’s plan to reduce the private health insurance rebate for people over 65.

Privately, Labor MPs admit the strong likelihood of the Reserve Bank delivering the year’s fifth interest rate increase next week will compound the government’s political problem over the high cost of living, with some calling for radical moves from the federal government.…