The United Kingdom's fiscal watchdog cut its forecasts for economic growth for the coming years - a setback for struggling Prime Minister Keir Starmer who promised voters last year he would speed up the economy.
But the Office for Budget Responsibility (OBR) said the government will now have more than double its previous buffer for meeting its fiscal targets, something closely watched by investors assessing the UK's borrowing risks.
The OBR - in forecasts published in error before Reeves began her annual tax and spending speech to parliament - said the tax hikes would amount to an annual 26.1 billion pounds ($A52.9 billion).
That will push the UK's tax-to-GDP ratio to 38.3 per cent of economic output, a fresh post-war high, although this will still be lower than the euro zone's average of 41 per cent last year.
Last year, Chancellor of the Exchequer Reeves ordered 40 billion pounds of tax hikes - the biggest since the 1990s - and she promised at the time that they would be a one-off.
"No doubt, we will face opposition again. But I have yet to see a credible or a fairer alternative plan for working people," Reeves said on Wednesday.
The removal of a two-child limit on welfare payments to poor families is opposed by most people according to opinion polls but the announcement earned cheers from Labour MPs.
Although the next general election is not due until 2029, the authority of Reeves and Starmer has been questioned within their party.
The Institute for Fiscal Studies think tank highlighted how the budget included an increase in spending in the short term while much of the push to raise taxes would hit later on.
"The future restraint, just before the next election? One could be forgiven for treating that with a healthy dose of scepticism," IFS director Helen Miller said.
The OBR cut its forecasts for economic growth which it now expected to average 1.5 per cent over the five-year forecast period, 0.3 percentage points slower than it predicted in March.
Reeves vowed to prove the watchdog wrong.
"We beat the forecasts this year and we will beat them again," she said.
But the OBR's verdict on the budget and the outlook foresaw UK living standards barely growing in the coming years, hurt in part by the higher taxes.
The OBR said the headroom - the amount of extra spending or tax cuts possible for the government while meeting its budget rules - stood at almost 21.7 billion pounds in four years' time.
In March, the OBR forecast headroom of just 9.9 billion pounds which was eaten up by the weaker economic outlook, higher-than-expected borrowing costs and a U-turn in July on welfare reform.
Deloitte Chief Economist Ian Stewart said the OBR's assumption of faster wage growth - and higher tax receipts - had rescued Reeves.
"However, today's announcements will likely have a longer-term impact on growth, as the chancellor is raising an extra 26 billion pounds a year in tax," Stewart said.
The OBR said a three-year extension of a freeze on income tax thresholds - first introduced by the previous Conservative government - would raise an extra 8.0 billion pounds in the 2029/30 financial year.
The generosity of pension incentives was scaled back with social security charges on salary-sacrifice pension contributions raising almost five billion pounds.
Increasing tax rates on dividends, property and savings income would raise 2.1 billion pounds, the OBR said, while a so-called "mansion tax" on homes worth more than two million pounds was expected to raise 400 million pounds in 2029/30.
Reeves maintained a freeze on the rate of fuel duty but she introduced a new mileage-based charge on electric cars.
