Research conducted by Bloomberg Economics indicates up to 130,000 jobs would be wiped out if companies responded to the tax rise by primarily cutting employment.

This would represent a 0.4 percentage point hike in unemployment and could result in the Bank of England cutting interest rates quicker than forecast.

Notably, analysts did not think this was the most likely outcome and estimate that the tax raid will likely be paid for by balancing the books between wages, prices and margins.

In Bloomberg’s base case, unemployment would go up by 0.1 percentage points which suggests job losses are likely to remain a potential issue in the months ahead.

Similar research carried out by Deutsche Bank estimated that around 100,000 jobs could be lost due to the overhaul to the tax system.

According to Bloomberg Economics, if companies raised prices to offset the cost of the National Insurance raid, then inflation would go up by 0.9 percentage points higher than it otherwise would have been by April 2026.

Addressing the Confederation for British Industry’s (CBI) annual conference earlier this week, Rain Newton Smith sounded the alarm that the tax rise would “hit growth”.

She explained “[Companies] are looking with heavy hearts to cut training and investment, delay decarbonisation projects, or pass on costs to customers.”

Despite this criticism, Reeves has remained adamant that raising the National Insurance for employers in the correct course of action.

Speaking at the same conference, the Chancellor shared: “I have heard lots of responses to the government’s first budget but I have heard no alternatives.

“We have asked businesses and the wealthiest to contribute more. I know those choices will have an impact. But I stand by those choices as the right choices for our country.”