UK bank shares climb as Labour budget avoids new taxes on sector
Updates headline and shares after budget documents released
LONDON, Oct 30 (Reuters) -Shares in Britain's banks rose on Wednesday as it appeared lenderswould escape a levy on their profits to help plug the gap in public finances as part of UK finance minister Rachel Reeves's first government budget.
Reeves made no mention of any tax increase on banks in herspeech, nor did documents accompanying the budget mention any such tax.
Financial equality campaigners had advocated for an increase in the surcharge that banks pay on their liabilities, known as the bank levy, or a so-called "windfall" tax on their profits.
The FTSE index of UK banks .FTNMX301010 rose 1%,having been in negative territory immediately before the speech, as Reeves spoke about taxes in other parts of the finance industry without mentioning a new bank levy.
Shares in Barclays BARC.L were last up 3.2%after trading slightly down when Reeves began speaking. NatWest NWG.L shares rose 2% and those in Lloyds LLOY.L were up 0.4%
All three banks reported rising profits last week despite a squeeze on income as interest rates start to come down.
The bank levy was introduced in 2011, after the global financial crisis, to curb excessive risk and reckless growth.
Industry body UK finance has lobbied for the levy to be phased out, citing its own research that banks in London pay higher tax rates than their peers in New York.
Campaign group Positive Money, on the other hand, has argued that any increase to Britain's banking surcharge or bank levy should be seen as a reversal of tax cuts given to banks under the Conservative government, not as a tax increase.
Reporting by David Milliken and Sachin Ravikumar
Writing by Lawrence White
Editing by Tommy Reggiori Wilkes
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