Rachel Reeves’ anticipated raid on capital gains tax (CGT) risks driving investors out of Britain and stunting the economy, analysts have warned.

The vast majority of the money raised from CGT comes from just 38,000 people per year and the Exchequer risks losing money instead of gaining it if some or all of this group choose to move abroad because of higher taxes, the Centre for Policy Studies (CPS).

Daniel Herring, economist at the think tank, said an increase to the rate of the tax - which ranges from 10pc to 28pc depending on the income of the person recording an profit and the type of investment involved - would send Britain plunging down the international rankings of competitive economies.

He said: “It is clear that Labour is playing a dangerous game with capital gains tax. 

“Capital gains tax hikes along with changes to non-dom status, employer’s National Insurance, and potential rises on inheritance tax may lead to an exodus of wealthy investors, entrepreneurs and job creators from the UK.

“The full effects are uncertain, but it is very possible that any rise in CGT will raise much less revenue than analyses suggest, and could very easily be revenue-negative. 

“The tax rises Labour appears to be planning would not just be bad for growth, but could make the fiscal situation even worse.”

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