THE Tories are reportedly preparing tax hikes and public spending cuts worth up to £50 billion in what would be a return to post-financial crash austerity.

The mammoth budget tightening would see public spending slashed and taxes increased to calm markets by generating a budget surplus of around £10bn, according to reports in The Times and Financial Times.

Prime Minister Rishi Sunak was said to have spent Thursday pouring over spreadsheets with Chancellor Jeremy Hunt - who met with austerity architect George Osborne the same day.

Treasury sources have said the country faces a “massive fiscal black hole”.

The cost of state borrowing has fallen since the effects of Liz Truss’s disastrous mini-budget subsided earlier in the year – which some Tories believed meant tax hikes and spending cuts of the kind currently being considered could have been avoided.

READ MORE: Tory austerity policies 'likely caused more deaths than Covid', academic says

But the Treasury believes the crisis is far from over, with a department source telling the Financial Times: “Markets have calmed somewhat, but the picture is still bleak. Britain is facing an economic crisis with a massive fiscal black hole to fill.

“People should not underestimate the scale of this challenge, or how tough the decisions will have to be. We’ve seen what happens when governments ignore this reality.”

Some ministers hope the measures will not feature in the autumn budget scheduled for November 17 but it is not known when they will be introduced.   

Sunak told the country the day after becoming Prime Minister that the UK faced a “profound economic crisis” while Hunt has warned of “eye-wateringly difficult” decisions he believed necessary.

Treasury calculations have shown a fiscal shortfall in public finances of between £30bn and £40bn which factor in an assumption that tax rises and spending cuts of around £45bn because measures to fill it are feared to make matters worse.

Hunt is also said to want additional headroom in case the economy performs worse than expected, raising the total figure to £50bn.

It would mean a return to the punishing public spending cuts of Osborne, who took over as chancellor in 2010.

Hunt had a call with David Cameron’s right hand man on Thursday as well as all his other Tory predecessors, according to The Times.

Commenting, the SNP's shadow chancellor Alison Thewliss MP said it is "crucial" that Scotland isn't pushed into accepting large-scale cuts.

"We need the full powers of independence to escape that," she said.

“The austerity measures ushered in previously by Tory governments destroyed communities, decimated public services, forced a wave of poverty and caused tens of thousands of excess deaths. It is disgusting that the Tories would signal to a repeat of that."

The MP went on: “Scotland is set on a different path, one where we’ve tried to lift people out of poverty and destitution, not force them into it. But all that work is at risk with every day we remain ruled by Westminster – demonstrating once again why Scotland must become an independent country.”

Analysis by the Glasgow Centre for Population Health revealed earlier this month it was likely the austerity measures of Osborne and his successors cost more lives than the Covid pandemic with experts estimating harsh public spending cuts cost 335,000 lives across the UK between 2010 and 2019.