City regulators have been asked to investigate possible insider trading following the leak of details about a bank tax increase, which preceded a significant surge in bank share prices. The Treasury Select Committee chairman has written to the Financial Conduct Authority (FCA) expressing concerns about market abuse.
Bank stocks saw a sharp rise on October 28, 2026, after a report emerged at 10:45 a.m. suggesting the tax hike would be less severe than anticipated. The Bloomberg report indicated the surcharge on bank profits would not reach the 8 percent previously feared and would be temporary. Approximately two hours later, in the House of Commons, Chancellor John Healey announced the surcharge would increase from 3 percent to 6 percent, lasting for 15 months from January.
By the time of the official announcement, shares in major banks had already climbed. Standard Chartered's stock increased by 5 percent, while Lloyds and NatWest saw gains of more than 4 percent. In the Budget debate, Meg Hillier, chair of the Treasury committee, stated, "It seems that some bank shares increased in value and I am concerned to see if there is any evidence of leaked market-sensitive information that may have led to that movement because that would be a very serious issue."
In a letter to FCA chief executive Nikhil Rathi, Hillier described the report as having "implications for relevant securities" and questioned whether it constituted an "improper release of inside information." She requested an assessment of the event's impact on the market. Similar concerns were also raised in a letter to James Bowler, Permanent Secretary to the Treasury.
The Office for Budget Responsibility estimates the windfall tax on banks, in addition to a 25 percent corporation tax, will generate £1.5 billion. This figure accounts for an estimated £190 million reduction in receipts due to some banks potentially shifting profits offshore in response to the higher rate. The increased tax has drawn criticism, with JP Morgan Chase deeming it to "lack principle." David Postings, chief executive of UK Finance, argued that raising bank taxes is not conducive to economic growth. Standard Chartered shares closed up 2.4 percent, NatWest gained 2 percent, and Lloyds rose 1.7 percent on the day of the announcement. UK Finance had previously stated that the UK is becoming an international outlier in its taxation of banks, with UK banks facing a total tax rate of 46.5 percent when employment levies and VAT are included, compared to rates in Frankfurt and New York.