Ahead Of Critical Budget, UK Bank Bosses Demand Policy Stability
Bank chiefs in London are calling for greater policy clarity and stability amid fears that looming tax hikes in the forthcoming U.K. budget could hit the financial services sector.
CEOs from Barclays, Citi and J.P. Morgan said the U.K. had successfully weathered the upheaval brought about by U.S. President Donald Trump’s tariff turmoil in April, with financial services since seeing stronger corporate profitability and an improved deal-making environment.
However, they also expressed caution ahead of potential tax rises in Finance Minister Rachel Reeves’ Autumn Budget, scheduled for Nov. 26.
Over the summer, it was widely reported that Reeves was considering a bank windfall tax to shore up a multibillion-pound hole in the public finances.
“Competition is an important part of growth, which is why actually milking the financial sector is not good, because it stifles investment,” said Barclays CEO C.S. Venkatakrishnan.
“It stifles competition, stifles growth. We are sitting in the financial heart of London. London is one of the two great financial centers of the world. You need to encourage it to grow, not tax it out of existence.”
Venkatakrishnan said the U.K. government has been “generally on the right track”.
But with the country likely facing higher taxes than other countries, he warned that “a harmonious, consistent approach to bank regulation, bank capitalization, including bank taxation” is critical in ensuring institutions remain competitive.
“The world is our oyster, the U.K. is our home, and we’ve got to work with both,” he said.
Conor Hillery, Deputy CEO and Head of Investment Banking, EMEA, at J.P. Morgan, said investors and companies want greater certainty when it comes to making investment decisions, planning, and acquisitions.
“Stability of policy and certainty are at a premium in certain parts of the world relative to others,” Hillery told CNBC in an interview on Wednesday, noting the increasingly extreme polarization of politics in other countries.
He said London remains “the premier capital market in Europe”, adding that improved deal activity in the U.K. has strengthened optimism in recent months, aided by economic resilience globally and comparatively strong corporate profitability following the U.S. tariff turmoil in the spring.
“In London in particular, we have seen over the last number of months, a growing number of companies looking to list in the U.K.,” Hillery said, describing the recently-announced £150 billion ($202 billion) of investment from U.S. companies as a “vote of confidence in the U.K.”
