Chancellor Rachel Reeves looks like bringing inflation back from the dead (Image: Getty)

The Chancellor’s Halloween Budget hit Britons with a staggering £40billion worth of taxes, making them feel poorer just as optimism was returning.

Her National Insurance tax raid will cost employers a staggering £25billion in what has been dubbed a tax on jobs, as it will cost them a fortune to hire new staff.

By sucking cash from the nation’s 5.5million small and medium-sized businesses, she will crush growth rather than boost it.

Reeves has also jacked up government borrowing by another £32billion, squeezing desperately needed growth.

Yet despite all that extra spending, the economy is now forecast to grow at a slower pace than under so-called “Tory austerity”.

Reeves has also driven up UK borrowing costs, as she plans to issue an unbelievable £300billion of government bonds this year to fund spending.

This has shaken investors’ faith in the UK, with investors demanding higher interest rates to buy gilts, the bonds our government issues to fund spending.

That will cost us tens of billions of pounds in extra interest,

Now here’s the worst. Experts say her Budget will drive up prices and mortgage rates, dragging us back into the inflationary nightmare we’ve only just escaped.

As the Office for Budget Responsibility has pointed out, Reeves’ raft of tax hikes will raise inflation as businesses pass the cost to consumers in the shape of higher prices.

In September, consumer price inflation dropped to 1.7%. Now thanks to Reeves Goldman Sachs reckons it will hit 2.3% by year end.

So instead of the Bank of England cutting base rates twice this year from 5% to just 4.5%, we might just get one cut.

An extra 0.25% on interest rates – courtesy of Reeves – would cost somebody with a £200,000 mortgage an additional £500 a year.

Analysts at Saxo Bank warn that Reeves’ plans to invest £100billion over the next five years will throw still more fuel onto the UK inflationary fire.

Saxo warns that public investment will crowd out private sector investment and put upward pressure on interest rates.

Reeves borrowing splurge is spooking the bond markets, which are demanding higher interest rates to lend to the overtaxed and overindebted UK.

Ten-year gilt yields have now climbed from 3.76% last month to more than 4.46% at time of writing. This may not sound much but represents an increase of almost a fifth in UK borrowing costs.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, warns that financial markets don’t expect interest rates to fall below 4% until 2026 at the earliest, amid “growing nervousness about the way Labour is steering the economy”.

She said Reeves’ Budget has made UK bonds riskier, as investors monitor how Reeves will spend all those extra billions she is borrowing.

The Budget backlash means higher inflation, higher interest rates, higher mortgage costs and lower growth. Just when we thought the inflationary nightmare was over, it’s coming back.