The share prices of major Britain’s major banks have called the government after a call to introduce a new tax on banking profits.
Traders and investors have reacted to the Institute for Public Policy Research (IPPR), stating that a windfall tax can increase up to £ 8BN per year for the government.
The think tank said that the policy would compensate taxpayers for damage on the cash printing drive of Bank of England.
While the Treasury has not commented on any policy, concerns made Natwest, Lloyds and Barclays the biggest collapse on the main index of the London Stock Exchange in early Friday.
Natwests and Lloyds share prices declined by more than 4%, and in early trade, Barclays declined by more than 3%.
Charlie Noon, Chief Executive Officer of Lloyds Bank, has spoken against any possible tax growth for banks in the first budget.
He said that efforts to promote the UK economy and promote a strong financial services sector will “not correspond to tax growth”.
Treasury has been approached for comment.
The IPPR, a left-wing think tank, said that a levy was needed on the profit of the banks as the Quantitive Essi (Qi) drive of the Bank of England had a cost of £ 22bn a year to the taxpayers.
Bank of England buys bonds – essentially long -term Ious – UK government and corporations to increase bond prices and reduce long -term interest rates.
The bank is selling some of these bonds, and the IPPR said it is now suffering heavy losses by selling government bonds below its purchase price and through the loss of interest rate.
The IPPR described those interest rate loss as “a government subsidy for commercial banks”, and highlighted the commercial bank profits compared to the epidemic.
Associate Director Carston Jung, for the economic policy in IPPR and Economists of former Bank of England, said that the bank and the Treasury had provoked “implementation of quantitative ease”.
He said, “Public money is flowing directly into commercial banks coffers due to an erroneous policy design,” he said.
“While families struggle with rising costs, the government is effectively writing multiple-pound checks to bank shareholders.”
One by tax targeting windfall profits related to QE will still leave banks with “quite more profit”, IPPR report saidDuring the tenure of Parliament to save the government up to £ 8BN in a year.
Ras Mold, AJ Bell said that the UK stock market had sour after suggestions, the investors surprised that “if the era of bumper profits, dividends and buybacks is now in danger”.
He said, “The time of debate by fueling by a report by the think-tank IPPR is unfortunate, given that it works with a new survey of Lloyds, which suggests an increase in business confidence despite cost pressure,” he said.
Financial Services Body UK Finance argued that another tax on banks would make Britain less competitive internationally.
The Trade Association said, “Here the banks -based banks already pay both tax overload and bank levy.”
