Britain's biggest banks have fired a renewed warning to the government against hiking taxes on the industry as UK Chancellor Healey prepares to deliver his inaugural Budget in October, reports Sky News

Britain's biggest banks have fired a renewed warning to the government against hiking taxes on the industry as UK Chancellor Healey prepares to deliver his inaugural Budget in October, reports Sky News.

Pre-Budget lobbying of this kind is a recurring feature of the UK fiscal calendar: domestically focused banks, whose earnings are heavily geared to the domestic economy and which already carry a sector-specific surcharge on top of mainstream corporation tax, routinely warn the Treasury ahead of fiscal events that further levies will feed through to lending and competitiveness. Past episodes have followed a familiar sequence: public warnings from the sector and its trade bodies, speculation about a bank levy or surcharge increase in the run-up to the Budget, and then a gilt and bank-equity reaction concentrated in the domestically focused names rather than the internationally diversified lenders, since the tax falls on UK balance sheets. The distinction worth drawing is between a windfall-style measure framed around elevated interest income and a standing surcharge change, as the former tends to be read as one-off while the latter alters the sector's structural return profile. The transmission to gilts is indirect, running through what any revenue measure implies for the overall fiscal arithmetic at an inaugural Budget, which typically carries more signalling weight about a government's fiscal framework than later set pieces. What is worth watching next is whether Treasury officials engage publicly with the sector's case in the intervening weeks, and whether the pre-Budget briefing pattern broadens to other revenue-raising targets.