UK bank shares steady after Labour budget appears to avoids fresh taxes on sector
LONDON, Nov 26 - Shares in British banks held steady on Wednesday after finance minister Rachel Reeves appeared to have spared them from fresh taxes, following months of speculation that she might increase a levy on the sector to help plug the gap in public finances.
A document from Britain's Office for Budget Responsibility, analysing the budget and published unexpectedly ahead of Reeves' speech, made no mention of any tax increase on banks.
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 in August 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.
Bellwether domestic lenders Lloyds Banking Group LLOY.L and NatWest NWG.L slipped 0.8% on Wednesday after trading up earlier in the day, while more internationally-focused HSBC HSBA.L and Barclays BARC.L rose 0.1%.
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