UK banking stocks dip on media report of budget tax increase
Barclays, Lloyds and NatWest fell as analysts said a surcharge increase could raise billions and help Healey keep deficit plans on track.
- On Friday, British banking stocks fell after reports that Finance Minister John Healey plans to tax lenders in his October 28 budget as he seeks to manage soaring government borrowing costs.
- Healey is considering reversing former Tory chancellor Jeremy Hunt's reduction in the surcharge banks pay on their profits from 8% to 3%, a move that could raise £2.25 billion annually.
- Trades Union Congress General Secretary Paul Nowak backed the move, citing the sector's "bumper profits," while UK Finance warned that increasing bank taxes would "weaken the UK's competitiveness."
- Lloyds Banking Group and NatWest led falls on the FTSE 100 Index, both down 2% in morning trading on Friday, while Healey faced criticism over an upbeat online video.
- The Institute for Public Policy Research recommended generating £1 billion from a temporary surcharge on commercial banks' windfall profits to help rebuild the Chancellor's fiscal buffer, which has dropped by up to £15 billion since spring.
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6 Articles
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UK banking stocks dip on media report of budget tax increase
British banking stocks fell slightly on Friday after the Guardian reported finance minister John Healey was set to tax the banks in his October 28 budget as he attempts to keep deficit reduction plans on track. Analysts covering banks have said an option open to Healey could include an increase in the 3% surcharge that banks pay on their profits.
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