British Finance Minister Jeremy Hunt said Sunday that "very difficult decisions" will be made, warning that taxes will rise in the face of the rising cost of living.
"There are going to be some very difficult decisions, but we are a resilient country and, frankly, we have faced bigger challenges in our history," Hunt told Sky News.
Inflation in the UK has exceeded 10%, and due to rising energy prices, many families are struggling to pay their bills and are afraid of having to turn on the heating.
"We will all have to pay a little higher tax, I fear," the British chancellor added, adding that "we will ask everyone to make sacrifices."
British newspapers reported that Hunt would announce a change in tax rates to impose more taxes on the wealthy with strict budget cuts.
The Sunday Times quoted the British chancellor on Saturday as saying that he will have to raise taxes in the budget plan this week in order to fix the public finances and ease a possible prolonged recession.
Hunt is trying to restore Britain's credibility among investors in its first budget plan since Rishi Sunak replaced Liz Terrace as prime minister last month, with a pledge to undo its economic policy mistakes, chief among them a series of unfunded tax cuts.
He was due to present a new budget plan on October 3, but when he was appointed by Rishi Sunak - who became prime minister - he said it would be "wise" to postpone the budget submission to November 17.
Last September, Terrace's "mini-budget" led to a slump in the bond market;
It raised borrowing costs and eventually forced her to resign.