Osborne to raise bank levy by £800m

The government has said it will increase the levy on bank profits to £2.5bn this year – raising an extra £800m.

The change would usually be set out in next month's Budget.

Chancellor George Osborne has yet to reveal the said the levy would help to give a context as banks set their bonuses in the next few weeks.

A deal with banks to increase loans to businesses and to limit bonus payments has not yet been finalised.

Osborne had originally announced that the government's new bank levy would be phased in, with a lower rate applicable in 2011.