HSBC’s finance boss said the bank is “very encouraged” by Andy Burnham’s agenda, despite slashing its UK growth forecast ahead of a potential tax raid. 

Pam Kaur, HSBC’s chief financial officer, said: “The UK is our home market, our focus in the UK is supporting customers with their growth ambitions.”

But when asked about a potential looming tax threat at the Budget, Kaur said she would not “speculate” 24 hours out. 

Chancellor John Healey will deliver his first major fiscal event on Wednesday, where he is expected to turn to the banks for a cash grab as he seeks to balance the books.

Banks pay a raft of sector-specific levies in the UK, including a three per cent surcharge on corporation tax, taking the effective rate to 28 per cent. A five per cent hike is expected to raise around £2bn a year for the Treasury purse.

Healey is widely expected to hike taxes on lenders following fierce lobbying from the Labour left and trade unions.

HSBC cuts UK growth forecast

Still, Kaur said HSBC was “very encouraged by the government’s growth agenda, particularly how we can lean in to support not just specific sectors like UK innovation, infrastructure and UK trade deals but also in terms of how we are the connector for the UK with the rest of the world”.

This came as the bank trimmed its UK growth estimate for 2027 to 1.1 per cent, down from 1.2 per cent in August. It was also a reduction from the 1.4 per cent pencilled in at the start of the year.

“In the UK, the outlook has deteriorated, and GDP growth forecasts are lower, with the economy expected to slow as the effects of higher inflation and interest rates impact on consumer spending and the housing market,” HSBC said in its third-quarter report.

Kaur said the bank would “respond accordingly” as customers make business investment decisions.

“When the lending demand goes up, we lend more. We are ready with the right risk appetite to do so. We’ll just have to see how businesses and customers react.”

The bank’s shares took a kicking on Tuesday morning, falling seven per cent, despite scoring a headline profit of $9.6bn. Revenue fell short for the quarter, with the group reporting $18.6bn, below the forecast of $18.9bn. The over $300m miss followed underperformance in banking net interest income, which delivered about $11.6bn, some $247m below expectations.