Healey tells bank bosses the fiscal picture is 'challenging' and keeps them guessing on a windfall tax
Chancellor John Healey met the heads of Barclays, HSBC, Lloyds, Nationwide and NatWest in Downing Street on 6 October, in a meeting of just under an hour run with City minister Lucy Rigby. He told them the fiscal position ahead of the 28 October Budget is "challenging" and made no decisions on tax, according to the Times and the Financial Times. He was said to be in "listening mode". Bloomberg has reported that one idea is a windfall levy that would not apply to international banks. The bankers warned that a tax would damage international investor sentiment towards the UK and that Bank of England capital rules already restrain lending. Sky News asked who is in charge of the Budget. The IMF, the Times reported, wants energy aid targeted at poor families only. The FTSE 100 rose 0.42% to 10,541.69.
Banks are one of the few places where a Chancellor can raise money without touching income tax, and they know it. A tax on domestic banks, but not foreign ones, would raise legal and political questions. And with gilt yields near 28-year highs, the Budget has to persuade bond investors as well as voters.
If you hold shares in UK banks, directly or through a pension, the Budget is a risk to watch. If you have a savings account or a mortgage, banks say a new tax could be passed on, though they have not said how.
Banks earned large profits when interest rates rose, and asking them to pay more is fair when other taxes are being weighed.
The banks say a levy would harm investment and lending at the point the government needs both, and that overseas owners would take fright.
Healey's silence is a tactic: it keeps every lobby guessing until the Budget. Watch whether the numbers leak in the next fortnight; a levy that spares international banks would be the one most likely to survive a legal challenge.
DailyDrop U.K. edition No. 2 · Morning · TUE., OCT. 6, 2026