Bank CEOs meet with Rachel Reeves in Downing Street amid tax concerns

Chief executives from major UK banks are set to meet with Rachel Reeves in Downing Street amid rising concerns over a potential windfall tax on the banking sector. This meeting, scheduled for Thursday, follows speculation that Labour may be considering new tax measures targeting banks, which have recently benefited from increased profits due to higher interest rates. The Bank of England Governor, Andrew Bailey, is also expected to attend, indicating the meeting's significance. The discussions will likely address Basel reforms, which aim to strengthen the resilience of global banks following the financial crisis. On the same day, the Bank of England will release its final interpretation of these rules, adding urgency to the meeting. Industry insiders have expressed anxiety over the possibility of new tax burdens, with some suggesting that banks are becoming increasingly jittery about the implications for their profitability. Recent research indicates that a substantial tax on the pre-tax profits of major banks could generate significant revenue for the government, potentially addressing the £22 billion deficit left by the previous administration. Additionally, there are discussions about increasing the existing 3% surcharge on bank profits, which could further impact the sector. Despite previous reassurances from Reeves regarding the stability of current arrangements, the financial landscape has shifted since the election, prompting a reevaluation of fiscal strategies. As the government prepares for the upcoming Budget, it faces challenging decisions that may disproportionately affect the banking sector, which has been identified as a target for revenue generation.