Raising taxes will damage Britain’s growth ambitions, the boss of Lloyds Bank has said.

Charlie Nunn has warned Rachel Reeves that increasing levies further will damage the UK’s competitiveness and undo the benefits of cutting red tape.

Speaking on Thursday, Mr Nunn said that the reforms unveiled by the Chancellor in her Mansion House speech this month “wouldn’t be consistent with tax rises”.

He said: “It’s important when looking at the competitiveness of the City of London that we have a competitive tax regime. We already have the highest tax regime in the financial services sector of any major economy.”

He sought to discourage Ms Reeves from increasing business levies after revealing pre-tax profits rose to £3.5bn in the first half of the year, much higher than analyst expectations.

It comes as Ms Reeves comes under growing pressure to fund ambitious spending plans, with some economists predicting she faces a Budget shortfall this autumn of up to £20bn.

Mr Nunn added that he was supportive of the Government’s plans to deregulate the finance industry, which was a cornerstone of the Chancellor’s Mansion House speech on July 15.

Specifically, Mr Nunn said the economy could receive a boost from an overhaul of ringfencing rules that force banks to separate their retail arms from their investment divisions.

He said: “Now is the right time in the context of growth and competitiveness in the future to look at ring-fencing in totality.”

Mr Nunn also said that now is the time to “revisit” regulations drawn up in the wake of the 2008 financial crash

He said: “There is a real opportunity to align regulation increasingly with competitiveness and growth.”

The banking chief, who has headed Lloyds Bank since 2021, also backed plans to remove rules that restrict banks’ ability to give investment advice to customers.

He said: “We really believe that regulation has constrained our ability to provide advice to those who most need it. There’s a real opportunity to invest in the long term.”

Mr Nunn’s comments come after Lloyds raised its interim dividend by 15pc to pay out more than £730m to shareholders.

The bank also reported that it would not be setting any additional provisions related to the car finance mis-selling case, which is currently being considered by judges at the Supreme Court.

Lloyds has already set aside £1.2bn to cover the costs of the case.

Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.