The Tories and Labour clashed over the economy as the Chancellor hinted at tax breaks for high earners while his opposite number insisted she had “no plans” to raise the burden on working people.

Jeremy Hunt signalled the Conservatives would seek to end the impact of tapering of personal allowances on larger incomes while Rachel Reeves vowed to deliver financial stability with a Thatcher-style commitment to “sound money”.

Workers lose £1 of their tax-free personal allowance for every £2 that their earnings go above £100,000, and anyone on more than £125,140 gets no allowance.

In an apparent bid to draw dividing lines with Labour, Mr Hunt used an interview with the Telegraph newspaper to dangle the prospect of a change to the current system.

“If you look at the distortions in the tax system between £50,000 and £125,000, they are bad economically because they disincentivise people from doing what we need, which is to work, work harder. And we are the party of hard work,” he said.

Mr Hunt also branded inheritance tax “profoundly anti-Conservative” but refused to be drawn on whether cuts to death duties would feature in the party manifesto.

Meanwhile, Ms Reeves on Saturday met supermarket workers in London to talk about the cost-of-living crisis, attacking the Conservatives’ approach to the economy as she pitches Labour as the party of “stability and tough spending”.

Speaking to reporters on the visit, she also suggested she wanted to cut taxes for “working people,” saying they should be “lower,” but insisted that “unlike the Tories” she would not make pledges she cannot keep.

Repeatedly pressed on whether she could rule out national insurance or income tax rising if Labour wins the election, the shadow minister said: “I have no plans to increase taxes.

“We’ve set out the plans that we do have to fund the immediate injection of cash into our NHS and into our schools, but we have no plans beyond that to increase taxes.”

Labour has said it would use tax on wealthy non-doms and impose VAT and business rates on private schools in order to fund improvements to public services.

The IFS think tank said the dire state of the public finances would “hang over the election campaign like a dark cloud” as it repeated its warnings that whichever party wins the election will face major challenges and trade-offs.

It comes after Ms Reeves praised Margaret Thatcher’s commitment to “sound money” in an article that featured on the front page of the Daily Mail, adding: “I will never play fast and loose with your money … I believe in sound money and public spending that is kept under control.”

Ms Reeves also dropped a hint that she might eventually be able to cut taxes for working people, saying she supported reductions if there was “a plan to pay for it”.

However, sharing the front page with Ms Reeves was an intervention from former prime minister Boris Johnson, who used his Mail column to warn of a “lurch” to the left and say voters would be “mad” to hand Labour a big majority.

Mr Johnson said the electorate could “save this country from socialism” as he threw his weight behind the Conservatives – though he failed to mention leader Rishi Sunak by name.

The Tories responded by saying there was a clear choice between sticking to a “plan which is already working” or going “back to square one” with Labour.

Sir Keir Starmer hammered the message that Labour could be trusted to deliver “economic stability” on a visit to the West Midlands as campaigning for the July 4 vote enters day three.

Repeating his mantra that “stability is change”, the Labour leader told reporters: “The number one mission is to focus on the economy and grow the economy, and the first step towards that is to stabilise the economy.”

He also confirmed that Labour would seek to extend the franchise to 16 and 17-year-olds if it wins the election, saying anyone old enough to work should “have a say” in how their taxes are spent.

Mr Sunak took the trail back to Yorkshire after completing a whistlestop two-day tour of the four home nations.

Both leaders kicked off the third day of campaigning on familiar ground, with the Prime Minister in his constituency and Sir Keir embarking on another visit to a lower-league football club at Stafford Rangers.

Earlier in the week, the Labour leader launched his pitch to voters at Gillingham Football Club, where he urged voters to “turn the page” on Tory “chaos”.

Mr Sunak met local veterans for breakfast in Northallerton on Saturday, where he joked that he avoided catching pneumonia after giving a rain-soaked statement outside Number 10 in which he announced the election.

“No pneumonia yet, my suit on the other hand … I’m not quite sure what state it will be in when I get back down to London,” the PM said.

He was later pictured door-stepping voters in Wimbledon, south-west London, saying in a post on X: “It’s clear what the British people want – bold action and a clear plan. That’s what we will deliver.”

The Times reported that the Prime Minister is readying himself to “double down” on the Conservatives’ stalled Rwanda deportation scheme by using the manifesto to announce ambitions for similar schemes with other countries.

His admission that flights to the east African nation as part of the party’s flagship immigration policy will not take off before the election overshadowed his initial economy-focused pitch to voters on Thursday.

More than 10,000 migrants have arrived in the UK so far this year after crossing the Channel, with Home Office figures published on Saturday showing that 288 people made the journey in five boats on Friday.

It comes after veteran Cabinet minister Michael Gove on Friday joined a record-breaking exodus of Conservative MPs announcing they will not stand at the election as the party languishes behind Labour in opinion polls.

The Housing Secretary revealed he was bringing a political career spanning nearly two decades to an end, saying it was time to let “a new generation lead”.

He was quickly followed by health minister Dame Andrea Leadsom, bringing the total number of Tory MPs not fighting their seats to 78 – a post-war high that exceeds the 72 who quit before Labour’s 1997 landslide victory.

The Liberal Democrats, who are targeting so-called blue wall seats in southern England, claimed Surrey Heath MP Mr Gove was “running scared” from the prospect of an electoral drubbing.

Sir Ed Davey’s party was continuing its trail across the South East on Saturday, with the leader hitting two marginal constituencies to highlight sewage-dumping as a key electoral battleground in areas near the coast.

The party leader was out door-stepping in Education Secretary Gillian Keegan’s constituency of Chichester, where he hopes to flip the Tory majority on July 4.

The Lib Dems claimed that party analysis shows water company bosses have pocketed some £54 million in bonuses since 2019 as they announced plans for a new, strengthened water industry regulator to replace Ofwat.