UK banks’ windfall profits renew calls for higher taxes

The editorial argues that the UK should tax banks more heavily, saying their recent profits have been boosted by higher interest rates while households and businesses face higher borrowing costs. It says the state helped protect banks during the 2008 financial crisis, so they should contribute more to the public finances and politicians should resist City lobbying.

The four biggest UK banks made £29bn in the first half of 2026, up a fifth on the same period in 2025, while the Bank of England paid interest on banks’ reserves at public expense. A proposed increase in the bank surcharge from 3% to 8% could raise about £2bn a year; campaign groups have also suggested other levies that they estimate could raise more. The banks say higher taxes could reduce lending, but the editorial cites £7.7bn spent on dividends and share buybacks in the first quarter without affecting lending.