Budget: UK announces increase in surcharge on bank profits

The British government announced on Wednesday that it would temporarily increase a surcharge on the profits of banks operating in the United Kingdom, to 6%, compared to the current 3%, to finance energy aid. “In the midst of global economic storms, I am counting on our banks to help finance some relief for British families,” said Finance Minister John Healey, on the occasion of the presentation of the first budget of Andrew Burnham's Labor government. “This supplement will be limited in time to finance immediate support for energy bills”: it will start in January 2027 and end 15 months later, the minister said.

In 2016, the conservative government introduced an 8% surcharge on corporate tax payable by banks operating in its territory. It was then reduced to 3% in 2023. The banking sector as a whole benefits from the rise in interest rates linked to the surge in oil prices with the conflict in the Middle East, which is fueling inflation throughout the world.

This surge in rates, for example, benefited HSBC, which reported on Tuesday that its net profit jumped 45.5% to $7.1 billion in the third quarter, also helped by cost reductions. Over the same period, Barclays' after-tax profit rose 13%, driven by strong growth in revenues from its equities division. This expected announcement does not, however, reduce the surcharge to its previous level of 8% and remains temporary.

Already on the rise in the morning, the shares of British banks climbed in the wake of this announcement. The shares of Loyds, NatWest and Barclays each gained more than 3% respectively on the London Stock Exchange.

Machine-translated from French