Osborne Increases Bank Levy

George Osborne has increased the levy on banks by £800M to £2.5BN.

He claims that he wants to make sure that "banks make a fair contribution to closing the deficit".

The reality is that he wants banks to increase lending.

Project Merlin, the ongoing talks between the government and banks over their behaviour and lending policies, is still dragging on. Osborne, by upping the ante over the bank levy, is showing the banks that he wants to see progress from their side in the discussions.