UK banks are facing renewed pressure over a potential windfall tax after HSBC, NatWest, Barclays and Lloyds posted bumper half-year profits, boosted by high interest rates and market turbulence linked to the US war on Iran. Campaigners and unions argue the lenders can easily afford higher taxes, urging new prime minister Andy Burnham to use the proceeds to ease cost of living pressures and fund social care reforms, though banking executives are pushing back, warning that higher taxes could curb lending and harm the wider economy.

The four largest lenders reported combined profits of £29.2bn in the first half of the year, with £13.7bn returned to shareholders via dividends and buybacks. Campaigners say a windfall levy could raise £19bn from the big four alone. Burnham has not commented specifically on a bank tax but has pledged to give households financial breathing space, while bank bosses including JP Morgan's Jamie Dimon and NatWest's Paul Thwaite have warned against further levies, with the sector having resisted such taxes since the 2008 financial crisis.