The stock market fell today as investors braced for a major tax raid in tomorrow’s Budget.

The benchmark FTSE 100 dropped 0.8pc, while the mid-cap FTSE 250 fell 1pc.

The market was also pushed lower by a falling oil price, hitting heavyweight BP, which fell 5pc.

Many investors were concerned on the likely outcome of the Budget. The Chancellor, Rachel Reeves, will set out her first tax and spending plans, following months of speculation and a row over the definition of “working people”.

Madsen Pirie, president of the Adam Smith Institute, told The Telegraph that tomorrow’s Budget “will come to be viewed as the most disastrous budget since the days of Clem Attlee pushed the UK into decades of decline.”

He added: “Raising the minimum wage will fall hardest on small business and the hospitality industry, already struggling to survive.

“Coupled with an increase in the so-called employer’s contribution to National Insurance, this is a budget guaranteed to cost jobs. It will be a job destroying budget just when we need to create jobs rather than cutting them.”

Labour had indicated that it would not raise taxes on “working people”, but last Friday Ms Reeves admitted that some working people will face tax rises in her Budget. She said that she could only commit to not raising “key” taxes on workers.

It came after Labour politicians had difficulties defining “working people”.

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