One of the UK’s leading trading platforms has warned Chancellor Rachel Reeves that raising retail investor taxes could wipe billions off the stock market, undermining government attempts to boost domestic investing and strengthen the London market.

According to research from trading platform IG, a two percentage point increase in both dividend and capital gains tax (CGT), often viewed as easy revenue targets for the Treasury, could knock £4bn off the value of London’s leading index.

The warning comes as speculation surrounding capital gain tax hikes grows, as the government repeated its commitment to not raise income tax, national insurance or VAT at the Labour party conference.

This has left the Treasury scrambling to find other sources of capital to fill a £20bn fiscal black hole

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