This is going to be a big budget – not to mention a complex budget.

It could, depending on how it lands, determine the fate of this government. And it’s hard to think of many other budgets that have been preceded by quite so much speculation, briefing, and rumour.

All of which is to say, you could be forgiven for feeling rather overwhelmed.

But in practice, what’s happening this week can really be boiled down to three things.

1. Not enough growth

The first is that the economy is not growing as fast as many people had hoped. Or, to put it another way, Britain’s productivity growth is much weaker than it once used to be.

The upshot of that is that there’s less money flowing into the exchequer in the form of tax revenues.

2. Not enough cuts

The second factor is that last year and this, the chancellor promised to make certain cuts to welfare – cuts that would have saved the government billions of pounds of spending a year.

But it has failed to implement those cuts. Put those extra billions together with the shortfall from that weaker productivity, and it’s pretty clear there is a looming hole in the public finances.

3. Not enough levers

The third thing to bear in mind is that Rachel Reeves has pledged to tie her hands in the way she responds to this fiscal hole.

She has fiscal rules that mean she can’t ignore it. She has a manifesto pledge which means she is somewhat limited in the levers she can pull to fill it.

Put it all together, and it adds up to a momentous headache for the chancellor. She needs to raise quite a lot of money and all the “easy” ways of doing it (like raising income tax rates or VAT) seem to be off the table.

So… what will she do?

Quite how she responds remains to be seen – as does the precise size of the fiscal hole. But if the rumours in Westminster are to be believed, she will fall back upon two tricks most of her predecessors have tried at various points.

First, she will deploy “fiscal drag” to squeeze extra income tax and national insurance payments out of families for the coming five years.

What this means in practice is that even though the headline rate of income tax might not go up, the amount of income we end up being taxed on will grow ever higher in the coming years.

Second, the chancellor is expected to squeeze government spending in the distant years for which she doesn’t yet need to provide detailed plans.

Together, these measures may raise somewhere in the region of £10bn. But Reeves’s big problem is that in practice she needs to raise two or three times this amount. So, how will she do that?

Most likely is that she implements a grab-bag of other tax measures: more expensive council tax for high value properties; new CGT rules; new gambling taxes and more.

No return to austerity, but an Osborne-like predicament…

If this summons up a particular memory from history, it’s precisely the same problem George Osborne faced back in 2012. He wanted to raise quite a lot of money but due to agreements with his coalition partners, he was limited in how many big taxes he could raise.

The resulting budget was, at the time at least, the single most complex budget in history. Consider: in the years between 1970 and 2010 the average UK budget contained 14 tax measures. Osborne’s 2012 budget contained a whopping 61 of them.

And not long after he delivered it, the budget started to unravel. You probably recall the pasty tax, and maybe the granny tax and the charity tax. Essentially, he was forced into a series of embarrassing U-turns. If there was a lesson, it was that trying to wodge so many money-raising measures into a single fiscal event was an accident waiting to happen.

Except that… here’s the interesting thing. In the following years, the complexity of budgets didn’t fall – it rose. Osborne broke his own complexity record the next year with the 2013 budget (73 tax measures), and then again in 2016 (86 measures). By 2020 the budget contained a staggering 103 measures. And Reeves’s own first budget, last autumn, very nearly broke this record with 94 measures.

In short, budgets have become more and more complex, chock-full of even more (often microscopic) tax measures.

Read more from Sky News:
What tax measures are expected in budget?
The political jeopardy facing Rachel Reeves in budget

In part, this is a consequence of the fact that, long ago, chancellors seem to have agreed that it would be political suicide to raise the basic rate of income tax or VAT. The consequence is that they have been forced to resort to ever smaller and fiddlier measures to make their numbers add up.

The question is whether this pattern continues this week. Do we end up with yet another astoundingly complex budget? Will that slew of measures backfire as they did for Osborne in 2012? And, more to the point, will they actually benefit the UK economy?

What you need to know today

And finally…

Donald Trump and Volodymyr Zelenskyy are set to hold talks over the Ukraine peace plan.

US and Ukrainian officials have held discussions in Geneva about a controversial 28-point proposal drawn up by America and Russia, which has since been countered by an amended deal drawn up by Kyiv’s European allies.

The White House said there were still a “couple of points of disagreement” as of Monday night, but spokeswoman Karoline Leavitt said there was a “sense of urgency” to strike an agreement.

“The president wants to see this deal come together, and to see this war end,” she added.

Mr Zelenskyy echoed that message, saying “there is still work for all of us to do to finalise the document”.

“We must do everything with dignity,” he said in his nightly video address, adding: “The sensitive issues, the most delicate points, I will discuss with President Trump.”

It comes after Mr Trump, who had accused Ukraine of not being grateful enough for US military support while the Geneva talks were under way, suggested the process could be moving in the right direction.

He had earlier given Kyiv until Thursday to agree to the plan, but US Secretary of State Marco Rubio downplayed the deadline, saying officials could keep negotiating.

Moscow, however, has already signalled its opposition to the European version of the peace plan.

It would halt fighting at present front lines, leaving discussions of territory for later, and also include a NATO-style US security guarantee for Ukraine.

Read more:
Trump’s 28-point peace plan in full…
…and Europe’s 28-point counterproposal

The talks in Geneva, Switzerland, had begun with Mr Rubio denying the original plan was written by Russia.

It appeared to include a number of longstanding Kremlin demands that have proved impossible for Kyiv, including sacrificing territory Russian forces have not even seized since the war began.

Ms Leavitt has also insisted the US is not favouring the Russians.

Starmer to lead talks of Ukraine’s allies

Ukraine’s allies in the so-called “coalition of the willing” will hold a virtual meeting today, chaired by Sir Keir Starmer.

The British prime minister said the alliance was focused on achieving a “just and lasting peace”.

It “matters for all of us, because the conflict in Ukraine has had a direct impact here in the UK”, he added.

Russia and Ukraine report overnight attacks

The talks will begin hours after the governor of Russia’s Rostov region reported three people had been killed and 10 more injured in a Ukrainian attack overnight.

The Russian defence ministry said 249 Ukrainian drones were downed over Russian regions in total.

Meanwhile, Russian drone strikes in Kyiv left at least two dead and triggered fires on residential buildings – forcing evacuations, and leaving several people injured.

The war was also a topic of discussion in a call between Mr Trump and China’s Xi Jinping on Monday.

Mr Xi urged “all parties” in the conflict to “reduce differences”, according to Chinese state news agency Xinhua.

He reiterated that China supported all efforts conducive to peace.

China has remained a consistent ally of Russia throughout its invasion of Ukraine, and is the top buyer of Russian oil, along with India.