London stocks opened lower on Friday as UK banks came under heavy selling pressure after a think tank raised the prospect of a new windfall tax.
The FTSE 100 fell 0.2% to 9,195.17, the FTSE 250 lost 0.3% to 21,687.03, while the AIM All-Share gained 0.4% to 763.87.
Attention later turns to US personal consumption expenditures data at 13:30 GMT, the Federal Reserve’s preferred inflation gauge, with investors weighing the impact of tariffs on price pressures.
NatWest tumbled 4.9%, Lloyds dropped 3.8% and Barclays sank 3.4% after the Institute for Public Policy Research suggested Chancellor Rachel Reeves could impose an annual windfall tax on lenders. The IPPR said such a levy could raise £32.3 billion over five years, giving Reeves an extra £3.6 billion of fiscal headroom.
In the FTSE 250, Keller Group rose 1.8% after Deutsche Bank Research upgraded the stock to ‘buy’, arguing its de-rating had gone too far. Hunting gained 1.2%, recovering some of Thursday’s losses after posting mixed half-year results.
On AIM, Galantas Gold jumped 9.8% after narrowing its interim loss, while capAI climbed 9.5% on news of a licensing agreement for its Creator42 AI creative hub. In contrast, Eqtec slumped 18% after unveiling a proposed capital reorganisation.
Wall Street focus later today will be on whether the PCE report reinforces expectations of a September rate cut or forces the Fed to stay cautious.