King says even finance tax’s backers secretly oppose charge

Tim Wallace
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NO CENTRAL bankers believe Europe’s planned financial transaction tax (FTT) is a good idea, Bank of England boss Sir Mervyn King said yesterday, and even politicians who publicly support the charge realise it is damaging.

In a bold attack on politicians’ plans the outgoing governor said the charge “is not likely to help” stabilise markets as its fans claim.

Eleven EU nations want to raise the levy on trades of securities involving parties in the countries or securities issued in them.

But Sir Mervyn believes EU leaders have been backed into a corner by a popular hatred of bankers and are now struggling to avoid implementing the tax.

“I can see why politicians are wary of expressing the true scepticism that exists even in quarters that appear to be behind it,” he said yesterday.

It came as new data from TMF Group shows Hungary’s FTT will raise 150bn forints (£425m) from the tax this year, barely half of the amount it hoped to bring in.