UK Treasury Select Committee Chair Hillier says that Chancellor Healey will face pressure this week from top British lenders to back a cut in their capital requirements, according to FT

Lobbying of the Chancellor by major lenders over capital requirements follows a familiar pattern in UK fiscal episodes: banks press for relief in the run-up to budgets and statements, and the tension that matters institutionally is between the Treasury, which is receptive to competitiveness and lending arguments, and the Bank of England's Prudential Regulation Authority, which formally owns the capital framework and has historically resisted political encroachment on it. Past pushes of this kind have tended to produce marginal adjustments, such as tweaks to ring-fencing thresholds, buffers, or mortgage risk weights, rather than headline cuts to core ratios, precisely because any reduction sits awkwardly with post-crisis commitments the UK has repeatedly reaffirmed. The relevant channel for markets is the bank equity and AT1 complex: lighter capital requirements raise return on equity and free balance sheet capacity, but the market has learned to discount lobbying until something emerges from the regulator rather than the political layer. A select committee chair airing the pressure publicly also cuts both ways, since committees in this position have tended to scrutinise deregulation rather than endorse it. The follow-ons are any response from the PRA or Bank officials, and whether the request surfaces in the fiscal event itself or dies in the pre-budget briefing round, which is where most such campaigns have ended.