In a TV interview on Sky News, Michael Geoghegan, Chief Executive of HSBC said the new 50 percent tax rate in the UK was “strange” and was causing many bankers to leave the UK to set up in Switzerland and other countries. He himself is moving his office to Hong Kong next week, although the banks HQ will remain in the City of London.

“I think when you start moving taxation for political reasons, the trouble is that it is an industry that can move,” he told Jeff Randall Live. Asked if damage was being done, he replied: “Yes.”

Hethought people in the UK had been given an easy ride because interest rates had been slashed close to zero, but he predicted pain ahead as inflation rises. “As interest rates come back up, that’s going to start squeezing and that does need to happen.”

Mr Geoghegan will, however, still spend up to a third of his time in the UK. He believes Britain needs to wean itself off debt and rein in its fiscal stimulus “sooner rather than later. How we finance our lives does need to change and I think, as the Governor of the Bank of England came out and said, we’ve got to start with our shopping list, we’ve got to cut our costs and I think that needs to start, not just in the UK but in other places, to stimulate all the economies.”

He said UK moves to toughen up regulation risked making the City unattractive. “The UK is leading it and it has been doing some very sensible things but the rest of the world hasn’t come forward so in a way I think maybe the UK is moving too fast.”