The lobby group UK Finance has warned the Chancellor, John Healey, that raising the bank surcharge from 3% to 8% would leave annual real UK GDP £1.2bn lower by 2029-30 than if the rate stayed unchanged, KuCoin reports.
The estimate comes from research commissioned by UK Finance. Its chief executive, David Postings, sent the research to Healey with a letter on 12 October. City lobbyists also warned that the rise could reduce lending and push some lenders to move jobs abroad.
The Guardian has reported that Healey is considering the 8% rate, which it said would raise over £2bn a year. The Treasury has not confirmed any change to bank taxes ahead of the Budget on 28 October.
The £1.2bn figure was produced for the banking industry. It is not an OBR forecast and has not been independently checked.