Pension tax breaks have become “eye-wateringly expensive”, Philip Hammond has said in a clear indication they could be cut in the Budget.

The Chancellor said that taxes will have to rise to pay for the "very large commitments" made before the Budget, including a £20billion funding boost for the NHS.

He made clear that pension tax relief, which costs the Treasury £39billion a year, is likely to be cut in a move that will provoke opposition from Tory MPs.

Some Eurosceptic Tory MPs have already indicated that they could vote against Mr Hammond's October 29 Budget in revolt over the Government's Chequers Brexit plans. Tax cuts that hit middle-class workers could embolden rebels.

The Telegraph disclosed earlier this week that Mr Hammond was preparing to cut pensions tax relief.