IMF suggests UK should cut spending rather than raise taxes on banks, as Healey prepares budget raid – as it happened
News Source
•Fri, 16 Oct 2026 15:42:59 GMT
📰 What Happened
The International Monetary Fund has told UK chancellor John Healey to look at cutting spending rather than taxing banks in his coming budget. An IMF official said that with UK taxes already near 40% of GDP, cutting costs makes more sense. The comments came as bank shares fell on news that Healey plans to raise more money from the sector. Lloyds and NatWest both dropped around 1%, though the FTSE 100 still closed higher.
🔍 The Backstory
Healey's predecessor, Rachel Reeves, raised taxes in her budgets. The Guardian reported that Healey now plans to take extra money from banks. The IMF suggested changing property taxes or VAT instead, and pointed to the pensions triple lock and better-targeted benefits as places to save.
City lobby group UK Finance warned that higher taxes would mean fewer business loans and mortgages. Banks have posted strong profits lately, helped by high interest rates.
🎯 Why It Matters
Bank taxes can change how much banks lend, which affects mortgages and small business loans. The budget also decides how much tax people pay.
The International Monetary Fund has told UK chancellor John Healey to look at cutting spending rather than taxing banks in his coming budget. An IMF official said that with UK taxes already near 40% of GDP, cutting costs makes more sense. The comments came as bank shares fell on news that Healey plans to raise more money from the sector. Lloyds and NatWest both dropped around 1%, though the FTSE 100 still closed higher.
Healey's predecessor, Rachel Reeves, raised taxes in her budgets. The Guardian reported that Healey now plans to take extra money from banks. The IMF suggested changing property taxes or VAT instead, and pointed to the pensions triple lock and better-targeted benefits as places to save.
City lobby group UK Finance warned that higher taxes would mean fewer business loans and mortgages. Banks have posted strong profits lately, helped by high interest rates.
Bank taxes can change how much banks lend, which affects mortgages and small business loans. The budget also decides how much tax people pay.