IMF urges Healey to cut welfare spending rather than lift bank surcharge to 8%
AI Market Summary
The IMF urged the UK to cut welfare rather than lift the bank profit surcharge from 3% to 8%, arguing tax raids deliver diminishing returns. A levy on bank earnings would pressure UK lenders, lift mortgage costs and deter foreign capital, per UBS and City executives. NatWest and Lloyds fell over 2%. UK bank equity sentiment stays negative into the October 28 Budget.
Impact level
● Medium
Affected assets
NCSKHSBC2USD/USDT-1.08%
AI Insight · NCSKHSBC2USD/USDTAI Insight
▼ Bearish
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UK Chancellor John Healey is considering raising the surcharge on bank profits from 3% to 8% to fund cost of living support. Banks are expecting a tax raid after the Iran war pushed interest rates higher and lifted their earnings. The Treasury has called the banking sector a jewel of the economy, but says decisions must be taken before the Budget. NatWest and Lloyds shares fell more than 2% on Friday.
