Banks say Healey is planning Budget tax raid on their profits

Senior banking executives have told the BBC they expect to be “on the menu” in the chancellor’s Budget tax later this month, as Rachel Reeves faces pressure to shore up public finances while maintaining economic growth. The warnings come as Treasury officials prepare to unveil a package predicted to hit bank profits, with sources familiar with the discussions suggesting measures could include a bank levy increase or new transaction taxes. Banking industry representatives have signalled concerns that such moves could dent lending and investment at a time when the UK economy is still recovering from previous shocks. The proposed tax changes sit alongside a broader fiscal package designed to address the inheritance-tax gap and fund social care reforms. Markets will be watching closely to see whether the measures represent a targeted strike on financial sector profitability or a broader shift in fiscal policy. Why it matters: The government’s ability to generate revenue from the City of London is a key pressure point in UK fiscal strategy. Banks contribute significantly through corporation tax and stamp duty, but profit taxes represent a smaller but politically visible levers. What happens next: The Budget is due later this month, with the chancellor expected to outline her fiscal priorities ahead of the next general election. Banking lobby groups are likely to intensify their campaigning ahead of the publication, while MPs from constituencies with major bank headquarters will debate the impact on local employment.