Rachel Reeves’s National insurance (NI) tax raid will destroy 100,000 jobs as hard-pressed companies are forced to lay off staff and freeze hiring, analysis has found.

Deutsche Bank warned the jobs market was already showing signs of “cracking” and warned that the Chancellor’s changes to NI would put further strain on employers.

Sanjay Raja, an economist at the bank, said he expected the hit will be twice as much as the 50,000 jobs predicted by the Office for Budget Responsibility in its forecasts published alongside the Budget.

Mr Raja said: “Given that the increase in NI contributions is ultimately a payroll tax, firms’ payroll decisions will come under significant scrutiny going forward.

“This won’t happen all at once. More likely, we will see declines in hiring and employment growth, with some firms adjusting more immediately to the increase in tax.

“How many jobs, including future jobs, would be lost based on the above? Just a little over 100,000 jobs.”

The Chancellor said last month that from April the rate of employer NI contributions will rise from 13.8pc to 15pc and the wage threshold at which it kicks in will fall from £9,100 per year to £5,000. The Treasury expects the move will raise £25bn.