Chancellor Rachel Reeves is predicted to unveil tax hikes of between £15 billion to £20 billion in next month’s autumn budget, Goldman Sachs forecasts.
This is likely to include increases to capital gains and inheritance hax as the new Labour government grapples with a £22 billion “black hole” in the public finances.
Labour has pledged to leave income tax, national insurance, VAT and corporation tax unchanged during the party’s election campaign.
Such promises complicate efforts to raise funds for the new government, meaning a series of smaller tax-raising plans are most likely to be revealed in the Budget.
Goldman said these could stretch to clamping down on relief on pension contributions.
The investment bank added any tax increases risk hampering demand and offsetting expansionary effects for the economy on the back of growing spending.
“We expect fiscal policy to remain a modest drag on demand in the coming years,” Goldman added.
Reeves is due to deliver her first Budget, which prime minister Keir Starmer has warned will be “painful” for some, on October 30.