UK bank stocks slide as 30-year borrowing costs hit highest since 1998
NatWest, HSBC, Barclays and Lloyds fell sharply as a government bond sell-off pushed borrowing costs higher across Britain and Europe
UK bank shares experienced a significant drop on Thursday as borrowing costs for the country's 30-year loans reached their highest level in over two decades. Concerns about Britain's financial situation and potential vulnerability to high oil prices and inflation rose ahead of the upcoming government budget. Banking stocks across Europe faced a sell-off, with yields for government bonds soaring to their highest in several years.
Major banks like Natwest, HSBC, Barclays, and Lloyds saw their shares plummet, with Natwest down 5.2%, HSBC 4.3%, Barclays 4%, and Lloyds 4.4%. The FTSE 350 banking index suffered its largest single-day decline since May 5, declining by 4.1%, and euro zone banking shares also saw a modest drop of around 3%. The decline intensified after reports surfaced that heads of Britain's top lenders, including Barclays, HSBC, and Lloyds, were called to a meeting with Finance Minister John Healey ahead of the budget on October 28.
Expectations are high for potential bank taxes in the Autumn Budget. The Treasury declined to comment when approached by Reuters.
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