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 the Guardian reported Finance Minister John Healey plans to tax lenders in his October 28 budget 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%, according to Guardian reporting.
- Trades Union Congress General Secretary Paul Nowak argued the tax rise would capture "bumper profits," while UK Finance warned it 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 for an upbeat online video.
- The Institute for Public Policy Research recommended generating £1 billion from a temporary surcharge on commercial banks' windfall profits to rebuild the Chancellor's fiscal buffer, which has dropped by up to £15 billion since spring.
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When Jamie Dimon and John Healey first exchanged remarks, the world’s most influential banker told the Chancellor how important it was to get public policy right. The Wall Street chief is understood to have said the right public policy was the key to solving the issues facing global economies, according to those close to the conversation. Reports at the time suggested Dimon warned of the impact higher bank taxes have on local jobs. A source clos…
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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