John Swinney has refused to rule out the possibility of freezing tax thresholds in a bid to generate more cash in December's budget.

The First Minister failed to dismiss the measure yesterday which would see workers dragged into paying more tax as their wages increase with inflation.

Reports suggest that the Chancellor Rachel Reeves is considering a similar freeze to help plug a £40billion 'black hole' in public finances.

Speaking with reporters in Edinburgh on Monday, Mr Swinney said: "I'm not going to rule anything in or out about the budget," he responded. The process, he noted, will be heavily shaped by the outcome of the UK Budget.

"What I will say is that there is a clear interaction between where the UK Government is, what choices it faces, and the issues that we are wrestling with.

"And obviously we'll consider all these issues in the period up until December 4 when we set our Budget."

In last year’s Scottish budget, the threshold at which people start to pay the lower bands of income tax rose in line with inflation but the threshold for when taxpayers in Scotland start paying the higher rate of 42% remained at £43,662.

This was the fourth SNP budget in a row where the higher rate was frozen.

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