Countries should avoid tax hikes to tackle the Covid-19 crisis, the Organisation for Economic Cooperation and Development has said, a day after Britain announced plans to raise its corporation tax.

The giant public deficits that have emerged as governments bailed out their pandemic-hit economies are fuelling pressure -and action in some countries - to raise taxes.

"Don't raise your taxes to pay for Covid," OECD head of tax policy Pascal Saint-Amans told an online update on his department's work.

"You need to make sure that the increase in the debt is sustainable by fostering growth, by favouring investment, by having your own policy. But tax is not the response," he added.

Though he did not single out Britain, Mr Saint-Amans made his remarks a day after London announced it would raise its corporation tax on big companies to 25% from 19% from 2023, the first hike in nearly half a century.

It aims to temper the burden with a two-year "super-deduction" for investment to spur a fast recovery from the Covid-19 crisis.