Bank shares slide as Healey is poised to reverse Jeremy Hunt's surcharge cut in October Budget
Kristalina Georgieva and John Healey at the IMF Meetings in Bangkok. The Chancellor told reporters departments must "manage with the budgets we've got" ahead of the October 28 Budget.
Bank shares in Natwest, Lloyds and Barclays fell sharply on Friday after reports that Chancellor John Healey has decided to target lenders in his October 28 Budget by reversing the reduction in the banking surcharge from 8% to 3%. The move is estimated to raise around £2bn a year, though the TUC is pressing Healey to set the rate as high as 16% — a level the union argues would generate £24bn over four years. The City was left bewildered after Healey spent Thursday in Bangkok calling banks "a jewel in the British economic crown", only for reports of the raid to emerge within hours.
Industry figures called the tax a 'retrograde step', warning it would push up borrowing costs for households and businesses.
Healey faces pressure from left-wing Labour MPs, the TUC and think-tanks, while business groups warn a raid could trigger a capital exodus from Britain.
JP Morgan's Jamie Dimon had already warned he could pull back from a proposed £3bn new Canary Wharf headquarters if the sector was targeted.
