UK Banks Brace for Potential Tax Hikes Amid Labour's First Budget

Banks in Britain are concerned about potential tax hikes in the upcoming Labour government's budget. Prime Minister Keir Starmer and finance minister Rachel Reeves have hinted at higher taxes, causing anxiety within the sector. Banks have enjoyed significant profits recently, and the industry fears additional surcharges may be imposed to boost public finances.

Banks in Britain are ramping up their lobbying efforts against potential tax hikes anticipated in the Labour government's first budget next month. This comes amid concerns that the sector may be targeted to bolster the country's public finances, according to senior industry sources consulted by Reuters.

Prime Minister Keir Starmer and finance minister Rachel Reeves haven't explicitly stated that banks will face higher taxes. However, Starmer recently alluded to the burden falling on those with "broader shoulders," stoking fears within the banking community. Recent years have seen banks enjoy substantial profits driven by higher interest rates.

Reeves is set to meet senior banking representatives soon to discuss the issue, sources say. Noteworthy is an upcoming meeting with Jamie Dimon, CEO of JP Morgan Chase, highlighting the sector's significant stake in these developments. The Treasury has remained tight-lipped, declining to comment on tax speculations outside a fiscal event.

(With inputs from agencies.)