# FTSE 100 Edges Lower on Bank Tax Fears but Holds Weekly Gain

- URL: https://stocks.freetheai.org/news/ftse-100-edges-lower-on-bank-tax-fears-but-holds-weekly-gain-7f3c98
- Published: 2026-10-16T07:54:08Z
- Category: markets; sentiment: mixed; impact: medium
- Symbols: [MARKET:UKX](https://stocks.freetheai.org/symbols/MARKET-UKX)
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The UK 100 Index (TVC:UKX), representing the FTSE 100, traded slightly lower on Friday, slipping 0.12% to 10,830 GBP and lagging behind other European markets. The decline was primarily driven by weakness in UK banking shares following reports that Chancellor John Healey is planning tax increases on banks in his upcoming budget. Major lenders felt the impact, with Lloyds Banking Group plc (LLOY) dropping 2.5%, NatWest Group plc (NWG) falling 2.0%, and Barclays PLC (BARC) shedding 0.6%. Lloyds was also pressured by an RBC Capital Markets downgrade to sector-perform from outperform.

Other sectors also contributed to the index's downward move. Pharmaceutical companies weakened as AstraZeneca PLC (AZN) lost 1.4% and GSK plc (GSK) slipped 1.0%, while Rio Tinto plc (RIO) decreased by more than 1%. Meanwhile, Ithaca Energy plc (ITH) dropped over 2% after Chief Executive Officer Luciano Vasques announced plans to retire by late March 2027, prompting a board search for a successor. Defensive shares provided partial support, led by BAE Systems plc (BA) up 0.9%, Rolls-Royce Holdings plc (RR) up 0.6%, and British American Tobacco plc (BATS) up 0.7%.

Despite the modest Friday pullback, the FTSE 100 remained on track to deliver a weekly gain of approximately 2.5%, building on the 0.9% increase recorded the prior week. Investors continue to monitor developments around the upcoming UK budget and tax proposals affecting financial institutions.

## Key points

- The FTSE 100 index fell 0.12% on Friday as concerns over potential UK bank tax hikes weighed on financial shares.
- Banking stocks declined, with Lloyds down 2.5%, NatWest dropping 2.0%, and Barclays falling 0.6%.
- Ithaca Energy dropped over 2% following news that CEO Luciano Vasques will retire by March 2027.
- Pharmaceutical and mining stocks also weakened, with AstraZeneca down 1.4% and Rio Tinto losing over 1%.
- Despite Friday's drop, the FTSE 100 remains on track for a weekly gain of about 2.5%.

## Questions and answers

### Why did UK bank stocks drop on Friday?

UK banking stocks fell due to reports that Chancellor John Healey plans to introduce tax increases on banks in his upcoming budget.

### How did the FTSE 100 perform overall for the week?

Despite Friday's decline, the FTSE 100 remained on track to achieve a weekly gain of around 2.5%.

### Why did Ithaca Energy shares decline?

Ithaca Energy dropped over 2% after CEO Luciano Vasques announced his intention to retire by the end of March 2027.