The Chancellor also said a leak revealing she had dropped plans for an income tax rise was ‘incredibly damaging’.

Rachel Reeves said she and Sir Keir Starmer had decided “as a team” not to raise income tax as she hit out at “too many leaks” in the run-up to Budget.

The Chancellor told MPs the “very close partnership” between herself and the Prime Minister meant the move to extend a freeze on tax thresholds instead had been made jointly.

It came as a senior Treasury official confirmed a leak inquiry into reports of economic policy that emerged before Ms Reeves’s statement to the Commons would cover ministers as well as civil servants and advisers.

Appearing before Parliament’s Treasury Select Committee, the Chancellor said a Financial Times story which revealed she had dropped plans for

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