UK Banks Brace for Potential Tax Hikes Amid Government Budget Concerns

UK banks are ramping up lobbying to counter potential tax hikes in the upcoming government Budget on Oct. 30, fearing they may be targeted to fill a £22 billion gap in public finances. Finance Minister Rachel Reeves is set to discuss the issue with bankers soon.

UK-based banks are intensifying their lobbying campaigns in anticipation of potential tax increases in the government's forthcoming Budget on Oct. 30. The banking sector is concerned that the government may look to their cash-rich industry to bolster public finances, according to senior industry insiders who spoke to Reuters.

Finance Minister Rachel Reeves is scheduled to meet with high-ranking representatives from the banking sector within the next few days. Bankers are bracing for discussions about a possible rise in taxes on their profits, as inferred from recent comments by Prime Minister Keir Starmer, who hinted that those with 'broader shoulders' might shoulder more of the fiscal burden.

The Treasury has not yet responded to requests for comment on the matter. Speculation suggests that the government is considering increasing an existing surcharge on bank profits, which industry insiders believe is the simplest route for filling the £22 billion shortfall in public finances. Such a move could potentially affect credit costs and availability, and shares of UK banks briefly dipped following related media reports.

(With inputs from agencies.)