Lloyds boss warns against more taxes on banks as profits rise 17%

The boss of Britain's largest mortgage lender has warned Rachel Reeves that increasing taxes on banks in her autumn budget would damage Labour's plan for the City of London to power an economic recovery.

- Kalyeena Makortoff

Charlie Nunn, the chief executive of Lloyds Banking Group, said yesterday that a rise in bank taxation "would not be consistent" with the chancellor's overtures as the government pushes to reboot growth.

Against a backdrop of mounting speculation that Reeves could use her autumn budget to announce fresh tax rises, his comments came as the high street bank reported a 17% jump in second-quarter profits.

Nunn acknowledged that a potential tax rise was ultimately a "political decision". However, he said targeting financial services would mark a stark reversal by the chancellor, who last week announced a series of changes to cut regulation and increase growth across the sector.

He said Reeves had made the case for a "strong financial services sector" to support the UK economy, and had highlighted that the industry had a "huge role to play" in terms of supporting households and businesses.

"We definitely believe that's an important thing to focus on, and obviously, therefore, it would not be consistent with a tax rise," Nunn said.