Published by Global Banking & Finance Review®
Posted on November 26, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleUK bank shares rose as finance minister Rachel Reeves avoided new taxes, boosting confidence in the sector and leading to gains in major banks.
By Lawrence White
LONDON -Shares in British banks rose on Wednesday as finance minister Rachel Reeves spared them from fresh targeted taxes, following months of speculation she might increase a levy on the sector to help plug the gap in public finances.
Reeves made no mention of any tax increase specific to banks in her speech, nor did a document from the independent Office for Budget Responsibility analysing the budget and unusually published ahead of her speech.
Bellwether domestic lenders Lloyds Banking Group and NatWest were up 3.8% and 2.5%, respectively, on Wednesday having earlier fallen, while more internationally-focused HSBC and Barclays gained 1% and 3.2%, respectively.
Those gains outpaced a 0.6% rise in the broader FTSE 100 benchmark.
Fears among finance executives that Reeves might tap lenders to help her out of a fiscal hole rose in August after a think-tank called for a new levy on the interest lenders earned from deposits held at the Bank of England, sending their shares down sharply.
Bank stocks have since rallied after media reports downplayed the likelihood of fresh taxes on a sector which Reeves is hoping to cajole into lending more to businesses in order to fuel growth, a key plank of Labour's agenda.
The decision to skip fresh bank taxes marks a repeat of Reeves' first budget a year ago, when lenders similarly feared a raid on their profits which never materialised.
British banks have enjoyed a run of bumper profits in the years since the COVID-19 crisis in 2020, as interest rate hikes in the aftermath of the pandemic fuelled their lending margins while households and businesses proved more robust than expected, helping lenders avoid defaults.
That run has continued since Labour won the general election in July 2024, with a FTSE index of British bank shares up 62% since then.
(Reporting by Lawrence White; Editing by Iain Withers, Kirsten Donovan)
Bank shares represent ownership in a bank. When individuals buy shares, they become shareholders and can benefit from the bank's profits through dividends and capital appreciation.
Explore more articles in the Finance category
