Key facts
- UK Chancellor John Healey is considering a windfall tax on banks.
- Options include reversing a reduction in the bank surcharge.
- An overhaul of Bank of England interest payments on reserves is also being weighed.
- Banks have recently reported record profits.
- Lloyds and Natwest shares declined, while HSBC and Standard Chartered rose.
UK Chancellor John Healey is reportedly contemplating a windfall tax on the nation's banking sector, a move long anticipated by the market. While specific details remain under wraps, potential measures include reversing a previous reduction in the bank surcharge or altering the Treasury's approach to interest payments on commercial bank reserves. Banks have recently achieved record profits, partly due to sustained high interest rates, leading to significant lobbying efforts against such a tax. Despite the anticipation, shares of UK-focused lenders like Lloyds and Natwest saw modest declines, while more internationally exposed banks such as HSBC and Standard Chartered traded higher.