** British banking stocks fall on Tuesday - NatWest NWG.L down 3.5%, Barclays BARC.L down 3.4%, Lloyds LLOY.L down 3% - outpacing falls in euro zone banks, down 1.2% .SX7E

** British politics top of mind. Keir Starmer is consulting colleagues about whether he can stay on as prime minister ahead of a crunch cabinet meeting. Ministerial aides quit on Monday and almost 80 lawmakers publicly called for him to go

** JPMorgan says: "UK Banks are likely to be in the crossfire as the domestic political landscape evolves and intra party dynamics draw more attention. While a general election looks unlikely given Labour’s majority, we see rising headline risk from leadership positioning and policy signaling."

** "Banks narrowly avoided a higher tax rate at the last Budget, but our base case now assumes the UK banking surcharge to increase from 3% to 5%, in line with MP (and possible leadership contender Angela) Rayner’s leaked memo, which would negatively impact 27E EPS by 3% for Lloyds, 2% for NatWest and 1% for Barclays, and 27E ROTE by 20-50bps," say JPM.

** Deutsche Bank also have a note out on British banks entitled "Cautious Optimism"