Bank stocks have fallen on fears that John Healey will launch a tax raid on the sector in the Budget.

NatWest and Lloyds Banking Group shares were both down more than 2pc in early trading on the London Stock Exchange as investors responded to news the Chancellor is poised to raise taxes on the industry.

The banking sector has come into Mr Healey’s focus after their earnings were boosted by higher interest rates caused by the Iran war.

He is understood to be planning to target lenders despite praising banks at an International Monetary Fund (IMF) event in Bangkok on Thursday.

He said: “They’re a big contributor to the economy.

“They’re an important part of our business.…