Chancellor John Healey is set to meet with senior banking executives this week amid growing speculation about potential tax increases targeting the financial sector. The meeting, scheduled for October 6 at 11 Downing Street, will include the chief executives of major lenders such as Barclays, HSBC, Lloyds, and NatWest. These discussions come ahead of Healey’s Budget announcement on October 28, as the government seeks revenue sources to fund Labour’s planned public spending.

The banking industry and some political figures have expressed concerns that additional levies could disrupt business activities and negatively affect the broader economy. UK Finance, the sector’s main lobby group, has emphasized the importance of maintaining a stable tax environment. It warned that raising taxes on banks could increase the cost of borrowing for consumers and businesses, potentially undermining the banking sector’s capacity to support economic growth.

Former Chancellor Sir Jeremy Hunt, who held the position from 2022 to 2024, issued a public caution to Healey against imposing new taxes on banks. Writing recently, Hunt highlighted the risks associated with taxing banks more heavily, arguing that capital mobility could lead to reduced investment, slower growth, and job losses. He pointed out that during his tenure, he reduced the bank corporation tax surcharge from 8 percent to 3 percent to maintain competitiveness, noting that despite this cut, banking sector tax revenues continued to rise. Hunt further warned that reversing course could trigger unintended economic consequences and potentially generate lower revenues than anticipated.

The banks themselves have shown resilience, benefiting from prolonged higher interest rates that boosted their profits. In the first half of 2026, the combined pre-tax profits of NatWest, Lloyds, Barclays, and HSBC totaled approximately £13 billion, reflecting a 16 percent increase from the previous year. This profit growth has led some to argue that the sector is in a position to contribute more to public finances.

However, industry leaders caution against measures that could undermine future investments. Jamie Dimon, CEO of JP Morgan Chase, which has a significant UK workforce, warned earlier this year that a substantial tax increase might force the firm to reconsider plans for a major new development in London’s Canary Wharf. Similarly, senior ministers within Labour reportedly remain divided on the issue, with some expressing concern about potential damage to the UK’s investment climate if bank taxes are increased.

In addition to bank levies, there is scrutiny around possible changes to capital gains tax (CGT) that may accompany the upcoming Budget. Experts suggest that if CGT rates rise, incorporating inflation relief in the tax calculation will be critical to avoid penalizing gains that merely reflect inflation. Hunt also cautioned that hikes in CGT could prompt wealthy investors to relocate elsewhere, further impacting the UK’s fiscal outlook.

While Treasury insiders indicate that Healey intends to approach the discussions with a listening stance, the meeting marks a key moment in balancing the government’s revenue needs against industry concerns, with significant implications for the UK’s economic environment going forward.