Chancellor John Healey announced a temporary rise in the bank surcharge from 3% to 6%, effective January, for 15 months, to fund energy-bill relief for households, with the measure expected to raise about £1.5 billion.

Healey described the increase as a temporary, breathing-space measure amid domestic and international economic pressures, including Iran-related turmoil, and noted there is no immediate plan to extend beyond the 15 months.

Lloyds reported a 10% year-on-year rise in underlying net interest income, contributing to stronger quarterly earnings alongside existing lending and deposit growth.

Lloyds Banking Group’s brands include Lloyds and Bank of Scotland, with the Budget backdrop and broader political economy context shaping the bank’s reporting.

Chalmers argued for reducing lending costs to spur economic growth and warned that higher taxes could hinder UK growth and international competitiveness, emphasizing cost efficiency in banking.

He stressed the banking sector must stay cost-efficient and internationally competitive to continue lending and support UK growth amid a tough economic environment.

Lloyds noted paying around £1.8 billion in corporate taxes year-to-date and called for a stable, predictable tax regime as a major taxpayer.

Lloyds highlighted balance-sheet growth with rising lending and deposits and noted it helped over 50,000 first-time buyers obtain homes this year through more than £1.25 billion in lending.

Healey framed the bank tax rise as temporary to provide relief amid domestic challenges and international turmoil, including Iran’s war impact.

Analysts say higher interest rates have boosted banks’ net interest income, while inflation expectations tied to energy prices influence the sector.

Chalmers questioned linking the bank tax to energy prices and suggested the initial 15-month levy could be extended or increased if the link persists.

Official projections estimate the 15-month measure will raise about £1.5 billion for the Treasury.