UK Bank Shares Fall on Reports of Budget Tax Surcharge Hike

UK banking stocks slid, with Lloyds down 2.3% and NatWest down 2.05%, dragging the FTSE 100 down 0.1% to 10,826.31 following reports that Finance Minister John Healey may raise sector taxes in the October 28 budget. The Treasury is considering lifting the bank surcharge on profits from 3% to 8%, which could raise over £2 billion annually, or pausing historical loss offsets. The moves follow £15 billion in half-year profits among the top four lenders, though industry groups warn tax hikes threaten City competitiveness.