Bank levy increase

Chancellor George Osborne has announced an increase in the levy on bank profits that will raise an extra £800 million this year.

The levy will increase to an annual rate of 0.075% and bring in a total of £2.5 billion in revenue to the Treasury.

The increase has taken most analysts by surprise as Mr Osborne originally planned to phase in the higher rate after 2011.

He told the Today programme that the increase was an effort to ensure banks made a "fair contribution" to the government's efforts to cut the deficit.

The government has been in talks with the banks for months, in discussions codenamed Project Merlin. Plans to tax bank bonuses and increase lending remain undecided.