FX.co ★ Banks Drag FTSE 100 Lower

The FTSE 100 index experienced a decline below the 9,200 mark on Friday, marking its fourth successive day of losses, primarily due to the underperformance of banking stocks. Notably, shares of NatWest dropped by 5.1%, Lloyds by 3.1%, and Barclays by 2.2%. This downturn followed a proposal from a prominent think-tank suggesting the reintroduction of a windfall tax on banks, reminiscent of measures from the Thatcher era. Leading up to the autumn budget, the Institute for Public Policy Research (IPPR) recommended taxing commercial banks to recover a portion of the profits they garnered from quantitative easing, addressing what it described as "unintended consequences" of the policy. Defying the broader market trend, Prudential and Rentokil Initial both recorded gains of approximately 2.5%. On a global scale, sentiment remained wary due to persistent inflationary pressures in the US, which have complicated the Federal Reserve's interest rate strategy. For the week, the UK index ended 1.3% lower, although it registered a 0.7% increase for the month of August.