Finance
UK's Reeves set to spare banks from budget tax raid, FT reports
Published by Global Banking and Finance Review
Posted on November 5, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 5, 2025
2 min readLast updated: January 21, 2026
Rachel Reeves plans to avoid tax hikes on UK banks to maintain competitiveness, focusing instead on broader fiscal measures.
(Reuters) -British Finance Minister Rachel Reeves is set to spare banks from a punitive budget tax raid, after making it clear to colleagues she wants the sector to remain competitive and able to support the country’s growth, the Financial Times reported on Wednesday.
Reuters could not immediately confirm the report. The Treasury declined to comment.
“There’s obviously a list of possible tax measures, but raising taxes on banks is a long way down that list,” the newspaper said, citing one person briefed on Reeves' thinking.
FT, citing another undefined source, said: "She is not minded to do this.”
Reeves is expected to raise tens of billions of pounds in taxes in her November 26 budget to stay on track for her fiscal targets, a key issue for bond investors.
In October, Rachel Reeves addressed concerns over potential tax hikes on banks, emphasizing her aim to make Britain "a great place to do business" and pointing to recent investments by U.S. financial firms.
"It's not all about tax, but I do want to have a competitive environment for all businesses in Britain," she said, adding that she did not dispute industry assessments that British taxes on financial services were relatively high.
Reeves said on Tuesday that "each of us must do our bit", raising expectations that she will increase taxes broadly. Any spending cuts are likely to be small.
The Resolution Foundation think tank - whose former head Torsten Bell is now a minister advising Reeves - predicts she will need to increase taxes by 26 billion pounds ($34.89 billion).
($1 = 0.7451 pounds)
(Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Chris Reese and Daniel Wallis)
The financial sector refers to the part of the economy that provides financial services, including banking, investment, insurance, and real estate. It plays a crucial role in the overall economy by facilitating transactions and investments.
Financial investments involve allocating money into assets like stocks, bonds, or real estate with the expectation of generating a return. They are essential for wealth accumulation and financial planning.
The UK economy is the economic system of the United Kingdom, characterized by a mix of private and public enterprise. It includes various sectors such as services, manufacturing, and agriculture.
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