Sir Keir Starmer has pledged “tough love” on the public finances in the Budget amid fears that Rachel Reeves is set to unveil sweeping tax rises.

The Prime Minister said the need to balance the books was a “challenge we cannot ignore” in another hint that there is pain to come for households.

Speaking at an international investment summit on Monday, he also said Labour’s huge majority meant it had the space to “take bold action very early on”.

In an upbeat speech on the economy, the Prime Minister told the leaders of 300 of the world’s biggest firms it was “time to back Britain”, saying he was determined to boost economic growth by tearing down planning barriers and “ripping up the bureaucracy that blocks investment”.

Speaking in the City of London, he said: “We’ve got our problems, of course we have. Our public services need urgent care, our public finances need the tough love of prudence.

“Challenges we cannot ignore because we know, just as every leader here knows, that those early weeks and months are precious. No matter how many people advise you to ignore it, you must run towards the fire to put it out, not let it spread further.

“The one thing that having a good majority gives you is the opportunity for bold action very early on in a parliamentary term, to do the things that have always been put in the ‘too difficult’ box. Now’s the time to absolutely grasp these things.”

It comes with Rachel Reeves, the Chancellor, widely expected to announce an increase in employers’ National Insurance as she struggles to raise cash to balance the books.

She has been warned that raids on non-doms, private schools and investors – Labour’s main policies in opposition – will not bring in as much money as hoped.

There has also been repeated speculation that she is planning to increase capital gains tax, though doing so could end up costing the Exchequer money.

Sir Keir said the Government would seek to boost longer-term economic growth by dealing with the “sheer volume” and “inconsistency” of regulation.

“We will march through the institutions and make sure that every regulator in this country – especially our economic and competition regulators – takes growth as seriously as this room does,” he said.

“It’s not just the volume of regulation, it’s also the fact that there’s not even a sort of clear landing path for investment. That is what we need to strip away.”

Sir Keir made the remarks before he was taken to task by a former chief executive of Google over the UK’s red tape on businesses.

Eric Schmidt said too much bureaucracy was “killing” the economy and suggested the Government should appoint a “minister of anti-regulation”. He warned that the goal of delivering clean energy by 2030 would prove impossible without deregulation.