The boss of Barclays has urged Rachel Reeves not to tax economic growth “out of existence” amid fears the Chancellor will raise levies in November’s Budget.

In particular, CS Venkatakrishnan warned the Chancellor against “milking the financial sector” by introducing a new tax on banks.

In an interview with CNBC, he said: “It stifles competition, stifles growth. You need to encourage it to grow, not tax it out of existence.”

The comments come after the Institute for Public Policy Research (IPPR) think tank, which is seen as being close to the Government, called for a windfall levy on the banking sector.

Speculation of higher taxes on landlords, investors and higher earners is also rife, with Ms Reeves facing a gap in the public finances widely thought to be worth tens of billions of pounds.

One estimate, which Ms Reeves has rejected, put the figure as high as £50bn.

In a research paper, the IPPR argued the move would help recover losses for the taxpayer that have resulted from the Bank of England’s quantitative easing programme after the financial crisis.

This essentially saw the Bank create money and use it to buy bonds from the banking sector, giving them reserves on which they then accrued interest.

Now, Threadneedle Street is selling off those bonds at a loss and paying out higher interest rates to the banks.

The IPPR says these losses are worth £22bn a year and urged a tax on deposits similar to that launched by Margaret Thatcher in the 1980s.

News of the think tank’s proposals earlier this year sent shares in listed British banks, including Lloyds, Barclays, HSBC and Natwest tumbling, knocking billions of pounds off their combined worth.

Mr Venkatakrishnan has also previously criticised the idea of a windfall tax for having “facile and fallacious logic”.

He said the tax would result in less hiring and “less credit into the UK economy” from banks, which would be forced to rein in lending to British businesses.

Charlie Nunn, chief executive of Britain’s largest lender Lloyds, also previously urged Ms Reeves against a tax raid, claiming it would damage the country’s growth ambitions.

The Government has been approached for comment.

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