The Italian authorities has launched a shock 40% windfall tax on the earnings made by banks from excessive rates of interest.

Ministers mentioned they deliberate to make use of the proceeds to assist mortgage holders - however mentioned it was a one-off levy to be utilized this summer time.

The announcement despatched banking shares tumbling. Italy's largest chain Intesa Sanpaolo was down 8% on Tuesday morning, whereas rival UniCredit dropped 6.5%.

It comes following the introduction of comparable taxes in Spain and Hungary - and amid requires the UK authorities to do the identical.

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Italy's right-wing cupboard, which agreed to the measure late final night time, has accused the nation's banks of raking in file earnings this 12 months off the again of upper lending charges, whereas failing to go them on to savers.

Intesa Sanpaolo mentioned final month it anticipated to make greater than €13.5bn (£11.6bn) this 12 months from its internet curiosity margin alone.

Deputy prime minister Matteo Salvini mentioned: "One has only to look at banks' first-half profits... to realise that we are not talking about a few millions, but of billions.

"If [it is true that] the burden deriving from the price of cash has... doubled for households and companies, what present account holders obtain has actually not doubled."

The tax will apply to the online curiosity margin, a measure of what revenue banks acquire from the hole between lending and deposit charges.

Citi analysts calculated the tax may wipe practically a fifth off Italian banks' internet revenue this 12 months. Sources mentioned the federal government expects to gather €3bn (£2.6bn) from the measure.

It additionally follows complaints from the Italian authorities over the European Central Bank's (ECB) choice to maintain rising charges.

Inflation slowed to six.4% in Italy final month - because the ECB hiked its benchmark deposit rate of interest to three.75%, the ninth consecutive rise in a row.

The UK authorities and regulators have expressed concern that British banks have also been slow to pass on higher rates to savers, however there was no indication that ministers will introduce the same tax right here.

The Bank of England increased interest rates for 14th time in a row to 5.25% final week and warned charges have been more likely to stay excessive as a part of efforts to deliver down inflation.

The Financial Conduct Authority has warned it is going to "take action" towards banks that can't present a justification for low rates of interest.

Campaigners within the UK welcomed the choice by Italy's authorities. Positive Money, which has known as for increased taxes on banks within the UK, mentioned on social media that it was "delighted" and urged ministers to comply with go well with.