The UK’s National Association of Pension Funds urged the government to continue to fight against the introduction of a financial transaction tax in Europe after the UK challenge was dismissed by the European Court of Justice.

James Walsh, policy lead, EU and international, NAPF, said in a statement that the ECJ ruled the UK’s case was premature as the details of the tax are presently unclear but the government has protected its right to make a more detailed challenge once the full proposal is released.

The meeting of EU Finance Ministers on May 6 could lead to the announcement of the introduction of an FTT across 11 member states ahead of the European Parliament elections between May 22 and 25.

Walsh said: “The cost of this tax would undoubtedly be passed on to the millions of private savers and pension scheme members in the UK by the financial institutions and banks that manage their investments. The NAPF urges the Government to remain vigilant against this threat to British savers and pensioners.”

Mark Hemsley, chief executive of Bats Chi-X Europe, agreed that the ECJ judgement was a procedural rejection and said the pan-European exchange remains opposed to an FTT.

Hemsley said in a statement: “We believe that increasing the cost of investing, even by a small percentage, will materially affect volumes and returns across the European Union. So far, this has been proved true: trading in Italian equities has slumped by 30% since the country’s introduction of a FTT, while in France, average daily turnover has dropped approximately 10% since the introduction of the levy.”

Credit Suisse trading strategy analysts said in a report last month that the introduction of an FTT in Italy and France had increased the implicit cost of trading and led to investors trading less.

Simon Lewis, chief executive of The Association for Financial Markets in Europe, said the trade group was disappointed by the ECJ decision given the seriously damaging implications of the proposed FTT.

Lewis said in a statement: “All the evidence continues to show that the proposed transaction tax will have serious harmful economic effects for end‐users of financial markets throughout Europe – not only within the 11 member states that are considering it.”