The boss of FTSE 100 juggernaut HSBC has become the latest banking voice to warn Rachel Reeves against raising taxes on banks over fears it would harm economic growth.

Georges Elhedery, HSBC’s chief executive, said on Wednesday any further financial pressures on lenders could spark trouble for the UK economy.

“Additional taxation on banks runs the risk of eroding our continued investment capacity in the business and in supporting our customers, and ultimately in delivering growth for the UK,” Elhedery argued.

This follows calls from his fellow ‘Big Four’ banking chiefs that a levy on banks would not align with the Chancellor’s growth agenda.

Paul Thwaite, NatWest’s chief executive, said “strong economies need strong banks” as he argued he would rather use the bank’s capital for loans to boost growth “for the good of the country”.

Meanwhile, Lloyds’ chief Charlie Nunn declared increasing taxes on lenders “wouldn’t be consistent” with helping boost the economy.

Weak fiscal position raises tax fears

The possibility of a tax hike on banks was heightened after a leaked memo revealed Deputy Prime Minister Angela Rayner recommending a series of revenue-raising measures to Reeves.