Rachel Reeves has said the government is facing difficult choices, as she promised she would not take risks with the public finances.

In her speech at Labour’s annual party conference in Liverpool, the chancellor pledged to keep “taxes, inflation and interest rates as low as possible”.

But hinting at further tax rises in November’s Budget, she said the government’s choices had been made “harder” by international events and the “long-term damage” done to the economy.

Reeves is facing a difficult Budget, with economists warning tax rises or spending cuts will be needed for the chancellor to meet her self-imposed borrowing rules.

Pressed over whether she would have to put up taxes in a BBC interview ahead of her speech, Reeves said “the world has changed” in the last year – pointing to wars in Europe and the Middle East, US tariffs and the global cost of borrowing.

“We’re not immune to any of those things,” she added.

If taxes do go up in the Budget, this prepares the ground for the government’s argument for why this is necessary.

Reeves criticised previous Conservatives government, accusing Liz Truss of sending mortgage costs “spiralling” with her mini-budget.

And in comments that will be seen as a swipe at the Labour mayor of Greater Manchester, Andy Burnham, Reeves said: “There are still those who peddle the idea that we could just abandon economic responsibility and cast off any constraints on spending.

“They are wrong – dangerously so – and we need to be honest about what that choice would mean.”

Burnham has continued his vocal criticism of Sir Keir Starmer during Labour’s conference and has not ruled out a leadership bid.

However, he prompted a backlash from some Labour MPs after he suggested ministers were “in hock to the bond markets” – a reference to the government’s self-imposed rules limiting spending and borrowing.

Despite dismissing the Tories as an “irrelevance”, Reeves repeatedly used the tagline: “Don’t ever let anyone tell you that there’s no difference between a Labour government and a Conservative government.”

Urging Labour activists to take “pride in what we are achieving”, she listed some of the party’s key pledges, including recruiting new neighbourhood police and opening school breakfast clubs.

It has been a torrid few months for the chancellor, who sparked a temporary rise in government borrowing costs in July following a tearful appearance in the Commons, amid speculation about whether she could keep her role.

Meanwhile, Reeves is facing pressure from some Labour MPs to increase spending, with many calling for the government to scrap the two-child benefit cap.

Ministers have hinted they could lift the cap in the Budget – a move which would cost an estimated £3.5bn a year.

In June the government also abandoned plans which would have cut nearly £5bn from the benefits bill, in the face of a major backbench rebellion.

However, delegates watching her conference speech in the main hall seemed determined to buoy the chancellor, with a standing ovation when she took to the stage and another when she addressed a protester holding a Palestinian flag interrupted her speech.

Reeves told the heckler: “We understand your cause and we are recognising a Palestinian state. But we are now a party in government, not a party of protest.”

Reeves also used her speech to criticise Reform UK, which has been topping opinion polls for several months, despite having only five MPs.

Labour has stepped up its attacks on the party at its conference.

“The single greatest threat to the way of life and to the living standards of working people is the agenda of Nigel Farage and the Reform Party,” the chancellor said.

“Whatever falsehoods they push, whatever easy answers they peddle, however willing they are to tear communities and families apart, they are not on the side of working people.”