Shares in Britain’s biggest banks jumped sharply in early trading after reports suggested they will avoid being targeted by new tax measures in tomorrow’s Budget.
NatWest climbed 3.3%, Barclays rose 2.9% and Lloyds Banking Group gained 2.95%, placing the trio among the strongest performers on the FTSE 100 as investors welcomed the apparent relief.
According to the Financial Times, ministers have opted against launching a fresh tax raid on the sector, following intense lobbying by the banks, who warned that higher levies would restrict lending and weigh on the wider economy.
The move marks a shift from proposals floated earlier this year. In August, the IPPR think tank argued that Chancellor Rachel Reeves should impose an additional bank tax to reclaim funds commercial banks receive from the Bank of England on money created through quantitative easing programmes.
For now, the market reaction suggests investors see the decision as a clear win for the sector, easing fears of further fiscal pressure just as profitability and lending conditions remain under scrutiny.
