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Professional Services

Chancellor looking to banks not to criticise Budget

It comes as Rachel Reeves looks set to dismiss calls for extra taxes on the sector.

º£½ÇÊÓÆµ banks.

Bank chiefs are expected to praise Rachel Reeves' Budget measures, according to reports, as the Chancellor looks set to dismiss calls for extra taxes on the sector.

Lenders are being encouraged to back the government and follow through with extra investment plans to support Britons up and down the country, a report in the Financial Times said.

One source told the newspaper that banks would make fewer criticisms of the government in return for being spared from extra levies.

Another figure said: "There was a frustration that the government's positive messaging about the economy was being undermined by unwelcome commentary."

There have been numerous calls from think tanks, MPs and lobby groups for Reeves to bring the bank surcharge back up to 8 per cent from its current 3% level and raise at least £2bn.

Some economists have argued that the Treasury should look to recover losses from the Bank of England's bond-selling programme after commercial banks made extra profits.

Government officials insisted that there was no "deal" struck between City giants and the government.

Individuals acting on behalf of banks' interests have argued that lending would fall if the Treasury slapped extra taxes on the sector.