The Budget saw changes to the bank levy as well as a new surcharge on banking profits.

George Osborne told the House: “Our bank levy was introduced to raise revenue and increase the stability of balance sheets, and it’s worked – but now it risks doing harm unless we change it.

“So I will, over the next six years, gradually reduce the bank levy rate – and after that make sure it no longer applies to worldwide balance sheets.

“But to maintain a fair contribution from the banks, I will introduce a new 8% surcharge on bank profits from the 1st January next year.

“By getting this balance right, it means we’ll actually raise more from the banks this parliament, but at the same time make our country a more competitive place to do business.”

Angus Campbell, senior analyst at FxPro, said: “The Chancellor made it clear he wants the world’s big banks to keep their headquarters in the UK by phasing out the bank levy which gave the stock price of HSBC a 1% boost immediately after the announcement and the FTSE 100 rallied another 10 points with other bank stocks also edging higher.

“This move was then followed by surprise reductions in corporation tax, reducing the rate from 20% to 18% by 2020, continuing with his cuts to corporation tax in the last parliament which are arguably one of the main contributors to the turnaround in the UK economy and fall in unemployment.”