Rachel Reeves LIVE: Chancellor 'piling up £14bn debt' with Brits forced to foot the bill

Matt Swannell, chief economic adviser to the EY Item Club, said: “Having ended the year on a poor footing, recent US tariffs are only going to make the UK fiscal arithmetic more challenging.”

He said that Chancellor Rachel Reeves’ recent spring statement “only left a slim margin for error against the fiscal rules”, which limit the Government’s ability to borrow to fund day-to-day spending.

“Most of this will likely be used up as the combination of reduced access to a major export market, a weaker global economy, and lingering uncertainty is set to hold back growth,” Mr Swannell said.

Elliott Jordan-Doak, senior economist for Pantheon Macroeconomics, agreed that “fracturing global trade and geopolitical uncertainties are going to make the Chancellor’s life even more difficult”.

Mr Trump’s sweeping tariffs on US imports are expected to impact UK economic growth, “which will further weigh on the public finances”, he warned.

“The public finances were already in a difficult position heading into the trade war, and we think both taxes and borrowing will need to be raised in the October budget,” he added.