RACHEL REEVES could be preparing to lift the two-child benefit limit in her autumn Budget.

When asked directly on Tuesday night about a report saying that she would announce the U-turn in her November statement, the Chancellor did not deny it.

Charities, campaigners and many within the Labour Party have long called for the policy to be scrapped, criticising it for dragging children into poverty.

Asked about a Guardian report that she would lift the cap in the Budget, Ms Reeves told a fringe event at the Labour Party conference: “Keir said in his speech today that we will reduce child poverty in this parliament, but we will set out the policies in the Budget.

“I think we’ve been pretty clear this week that we can’t commit to policies without us explaining where the money is coming from.”

Adding that there were “real financial constraints” due to persistent inflation, trade tariffs, global conflicts and increased borrowing costs, she said: “I would be the first person to want to find some money down the back of the sofa to pay for lots of different things.

“But I have to be Chancellor in the world as it is, not in the world as I might like it to be.”

The two-child cap was first announced by the Tories in 2015 and took effect in 2017.

It restricts eligibility for child tax credit and universal credit to the first two children in most households.

More than 100 children across Britain are plunged into poverty by the policy every day.

A spokesperson for the Children’s Charities Coalition said: “Removing the two-child limit entirely would immediately benefit hundreds of thousands of children and be a huge step forward in tackling the shameful levels of child poverty in this country.”