EVERYONE will pay more tax and see public service cuts, the Chancellor has said ahead of Thursday’s autumn statement.

With the UK economy the weakest of the G7 industrialised nations, Jeremy Hunt also admitted Brexit was a factor that came with “costs” as well as opportunities.

However he insisted it could yet be a success, and said the UK was resilient.

The SNP said the Chancellor was planning "austerity 2.0".

It was reported overnight that Mr Hunt is planning to cut public spending by around £35billion and raise taxes by £20billion.

The money raising measures include freezing the thresholds at which people pay higher rates of income tax, meaning more people will pay extra as their wages increase.

The threshold for the top rate is expected to be cut from £150,000 to £125,000.

The windfall levy on energy companies is also set to be extended for several years.

Speaking on BBC One’s Sunday with Laura Kuenssberg, Mr Hunt said: “We are going to see everyone paying more tax. We're going to see spending cuts. 

“But I think it's very important to say that we are a resilient country. 

“We're also a compassionate country. 

“So we will introduce a plan that will see us through the very choppy waters that we’re in economically, but we'll make sure that we protect the most vulnerable and in particular deal with the single biggest worry for people on low incomes, which is the rising cost of their weekly shop and rising energy prices. 

“And economically, that makes sense too, because inflation is much higher than it should be, and that is destabilising people's family finances, as well as being very bad for businesses and the economy.”

Paul Johnson, director of the Institute for Fiscal Studies, told the same programme that "everyone" paying more tax implied a hike in VAT, although rises in income tax and national insurance were also options.

The UK economy shrank by 0.2 per cent between July and September, heralding what the Bank of England believes will be a record two-year long recession.

The UK was the only one of the G7 nations to see its economy shrink over the quarter, with Germany growing by 0.2% and the United States by 0.6%.

The UK is also the only G7 country to have a smaller economy now than before the Covid pandemic, with a contraction of 0.2%, compared to 0.2% growth in Germany and 4.2% in the US, suggesting Brexit is a factor. 

Put to him that everybody would notice the tax rises and cuts, Mr Hunt said: “I think people will notice because these are difficult decisions, but they will also see there's a plan to get through this.

“And if we do this wisely, we can make this recession that we may be in as short and shallow as possible, And that's certainly what I'll be trying to do as Chancellor.

“I want people to understand that although these are difficult decisions, we will be doing it in a way that means that we get through to the other side.

In a dig at his predecessor Kwasi Kwarteng, he added: “But as a country, I think we know that the way you deal with problems is by facing into them, not by pretending they're not there. I want to give people the confidence that we are actually doing that.”

Asked about whether the Brexit deal struck by the UK Government was holding the economy back, Mr Hunt did not deny it was a factor.

He said: "Brexit is a big change that the country voted for, and whether it's a success or not, is up to us whether we embrace the opportunities of a different type of economy to one that we would have been in as part of the European single market.

"I believe we can make a tremendous success of it, but it's not going to happen automatically.

"I don't deny there are costs to a decision like Brexit, but there are also opportunities and you have to see it in the round.

"I think we need think, That's what we've decided to do it, and we need to make it a success."

He denied the measures in the autumn statement would amount to austerity, which he defined as a "wilful choice to make things worse in the short term for some long term gain".

He said: "That's not going to happen."

The SNP's Shadow Chancellor Alison Thewliss said: "A return to Tory Austerity 2.0 would be a hammer blow for millions of people across Scotland and the UK who are struggling to make ends meet.

“The Chancellor should be preparing a Budget that strengthens support to put money into people’s pockets and helps to properly tackle the Tory-made cost of living crisis - instead it's clear he is intent on ushering in a new era of Tory austerity by attempting to balance the books on the backs of some of the most vulnerable in society.

“The Chancellor must rethink and reject those plans and look to deliver real support as a bitter winter approaches for many - including protecting the pensions triple lock, raising benefits in line with inflation, expanding the windfall tax, and introducing a tax on share buybacks and scrapping the controversial non-dom status.

“The reality is, however, that we are in this economic crisis precisely because of the damaging decisions taken by Westminster. The only way to properly tackle the cost of living crisis and build a fairer future is with the full powers of independence.”