Updated at\u00a003.34 EDT<\/p>\n
Key events<\/p>\n
The jump in interst rates which has boosted bank profits is also weighing on the housing market.<\/p>\n
Zoopla has reported this morning that 35% of UK homes are in postcode areas where house prices are falling, up from 12% a year ago.<\/p>\n
Photograph: Zoopla House Price Index<\/p>\n
These price falls are \u201cconcentrated in London and the South East\u201d, it says, where 85% of homes are in local markets with price falls.<\/p>\n
This trend is due to higher mortgage rates which have increased the cost of buying and made buyers more selective \u2013 the number of sales agreed over the last four weeks is seven per cent lower than a year ago across the UK.<\/p>\n
Photograph: Zoopla House Price Index<\/p>\n
Richard Donnell, executive director at Zoopla, says,<\/p>\n
double quotation mark\u201cThe extra cost of mortgages has made home buyers more selective while greater choice of homes for sale has increased the scope to negotiate on price. The impact is being felt by sellers in southern England where house price falls are most concentrated as average prices continue to rise across the rest of the country.<\/p>\n
\u201cThere is still demand to buy homes, and those that are well priced and presented are selling just as quickly as last year. Getting the price right from the start is essential. Overpricing significantly reduces the chances of selling, so sellers should seek advice from local agents on buyer demand and the right asking price for their home.\u201d<\/p>\n
Share<\/a>Record 738,000 UK businesses in \u2018significant\u2019 financial distress ahead of the Budget<\/p>\n Although HSBC<\/a> has been raking in the profits, smaller businesses are finding life rather tougher.<\/p>\n The number of UK businesses in \u2018significant\u2019 financial distress has hit a record high of 738,144, according to the latest Red Flag Alert research from financial group BTG. That\u2019s the highest level since the report began in 2004.<\/p>\n BTG found that the highest volumes of firms strugging operate in support services, construction and real estate and property services.<\/p>\n Julie Palmer, managing partner at BTG, says its a worrying sign ahead of the budget:<\/p>\n double quotation mark\u201cRecord levels of \u2018significant\u2019 financial distress underline just how many businesses are approaching the Autumn Budget with limited financial headroom. While firms will naturally be looking for clarity on taxation and economic policy, many of the pressures they face extend well beyond any single Budget announcement.<\/p>\n \u201cMy real concern is for consumer-facing sectors such as leisure and hospitality, particularly as we enter the run up to the vital Christmas trading period. Higher employment costs, rising inflation and interest rates will add real-world pressure to many domestic budgets. Add into that a forecast 26% rise in the January 2027 energy price cap and households are likely to concentrate on the essentials.<\/p>\n Share<\/a>Photos: Healey perusing the budget statement<\/p>\n We\u2019ll find out in around 28 hours what new taxes the chancellor has decided to impose on the UK banking sector.<\/p>\n These pictures from the Treasury show John Healey preparing for the budget in his flat in Downing Street in recent days:<\/p>\n Photograph: Kirsty O\u2019Connor\/Treasury Photograph: Kirsty O\u2019Connor\/Treasury<\/p>\n You\u2019ll note there appears to be a bottle of HP sauce behind Healey\u2019s left ear, as the chancellor moves between his kitchen island and the dining table.<\/p>\n Frankly I\u2019m surprised it\u2019s not closer. The chancellor is rather fond of a dob of brown sauce, and even carries a bottle with him.<\/p>\n The Times reported that last week<\/a> he bought a sausage roll from Greggs, pulled a bottle of HP Sauce from his briefcase and \u201cpermitted himself a moment\u2019s indulgence\u201d after announcing the approval of the Jackdaw gas field in the North Sea.<\/p>\n Share<\/a><\/p>\n Updated at\u00a005.49 EDT<\/p>\n HSBC CFO\u2019s, Pam Kaur, was asked by reporters why the bank\u2019s shares were down today (they fell in Hong Kong first, and then in London).<\/p>\n Kaur suggested some reasons:<\/p>\n double quotation mark\u201cI think in a high interest rate environment, there\u2019s sometimes a market expectation that we upgrade guidances or we change our targets, and particularly from a banking NII perspective. So that\u2019s all I can think of.\u201d<\/p>\n Share<\/a><\/p>\n Here\u2019s Will Howlett, financials analyst at Quilter Cheviot, on the drop in HSBC\u2019s shares this morning:<\/p>\n double quotation mark\u201cHSBC\u2019s third-quarter results have fallen a little short of market expectations. Revenue was weaker than anticipated, with pressure on net interest income and a slowdown in wealth, and that disappointment has translated into a slide in the share price.<\/p>\n \u201cThe numbers themselves are not disastrous. Profitability remains strong, with an 18.2% return on tangible equity, while loan losses were better than expected and HSBC has reiterated its target of delivering returns above 17% over the next three years. The bank is also returning another $1bn to shareholders through a buyback.<\/p>\n \u201cThe issue is that HSBC has set a high bar for itself. Following a strong run for the shares, investors have become accustomed to robust results, so even relatively modest misses can prompt a sharper reaction. Today\u2019s fall therefore looks more like disappointment against high expectations than a significant deterioration in the underlying business.\u201d<\/p>\n Share<\/a><\/p>\n The 6% drop in HSBC\u2019s share price this morning has made rather a dent in the FTSE 100 share index.<\/p>\n The \u2018Footsie\u2019 is down 108 points, or 1%, at 10,659 points.<\/p>\n HSBC is the largest member of the share index (it\u2019s on track to lose that crown by the end of the day!), ahead of Shell and AstroZeneca.<\/p>\n At the close of play yesterday, HSBC was worth almost \u00a3234bn, ahead of Shell at \u00a3228.75bn.<\/p>\n Consumer goods maker Reckitt Benckiser (-6.3%) are also pulling the FTSE 100 down, after it lowered its financial guidance for the year this morning.<\/p>\n Share<\/a>HSBC shares drop by over 6%<\/p>\n The City is not impressed with HSBC\u2019s financial results, having expected even higher profits.<\/p>\n Shares in HSBC are down 6.7% in early trading, and appears to be pulling the rest of the banking sector down too.<\/p>\n That\u2019s because the 32% jump in profits is slightly below analyst forecasts (although $9.6bn should hardly be sniffed at!).<\/p>\n Chris Beauchamp, chief market analyst at IG, says:<\/p>\n double quotation mark\u201cYou don\u2019t usually get fireworks from HSBC results, and these are no exception. There are signs of some improvement overall, and a boost to the buyback is welcome, but it\u2019s clear why the market wasn\u2019t really inspired by these numbers.<\/p>\n HSBC seems to be doing ok, but ok doesn\u2019t really cut it in a world where inflation is back on the menu and growth may start to slow. At least it\u2019s not exactly rolling in profits this time around, providing some useful air cover ahead of a UK budget that will may include another raid on banks.\u201d<\/p>\n Share<\/a>How cost-cutting and lower legal bills boosted HSBC’s profits<\/p>\n One strong argument for higher bank taxes is that the financial sector has been benefitting from the increase in interest rates in recent years.<\/p>\n That has allowed them to swell their net interest income (NII) by raising the rates charged on borrowers by more than those paid to savers.<\/p>\n However, NII is only a small factor behind the jump in HSBC\u2019s profits in the last quarter. NII rose by 6%, or $500m, to $9.3bn \u2013 which HSBC<\/a> attributes to \u201cdeposit growth and the benefit of reinvestment of our structural hedge at higher yields\u201d.<\/p>\n HSBC also profited from a cost-cutting drive \u2013 operating expenses fell by 12%, or $1.3bn, to $8.8bn.<\/p>\n It also benefitted from a $1.4bn drop in legal provisions \u2013 this was the sum it set aside last year to cover a claim related to Bernie\u2019s Madoff\u2019s Ponzi scheme<\/a>.<\/p>\n Share<\/a> HSBC was also quizzed about the impact of last week\u2019s Google Cloud outage<\/a>.<\/p>\n CFO Pam Kaur says:<\/p>\n double quotation mark\u201cWe do apologise to the impacted customers for any inconvenience. But the services did return fairly quickly to normal during the same day. This issue also had broader market impact.<\/p>\n \u201cNow we have a robust process in place where we investigate every incident to share any learnings and to do read-across to ensure that similar incidents don\u2019t happen in the future. And we are very much utilising our risk management capabilities and indeed building upon them to identify, report and manage risk across the organisation.<\/p>\n Share<\/a><\/p>\n Updated at\u00a003.45 EDT<\/p>\n HSBC: won’t comment on press speculation on job losses<\/p>\n HSBC has also been asked about the impact of AI on the jobs market, after rival Barclays announced 5,000 job cuts last week.<\/p>\n The Financial Times reported earlier this month<\/a> that HSBC is planning sweeping job cuts in its UK wealth management business, but the bank dodged the question today.<\/p>\n CFO Pam Kaur told reporters:<\/p>\n double quotation mark\u201cWe know that AI will change how work is done across industries, and of course it will impact some roles. It\u2019ll transform other roles, and it will change them, while creating entirely new roles. So beyond that, there\u2019s nothing specific in a number-term that I want to share or indeed have to share at the moment.<\/p>\n \u201cFor the wealth management business, the UK is a home market and we are a leading wealth manager. I\u2019m not going to comment on press speculation on job losses, but what I can tell you is that in terms of customer engagement and serving the needs of our customers, we absolutely focus on the workforce we have, both in terms of skilling it and building on it. And we are also hiring in multiple areas in the UK.\u201d<\/p>\n Share<\/a><\/p>\n Updated at\u00a003.38 EDT<\/p>\n TUC: HSBC profits make it \u201cblatantly obvious\u201d banks can afford more tax<\/p>\n The TUC are also urging the Chancellor to increase taxes on banks in tomorrow\u2019s Budget, arguing the sector could pay tens of billions of pounds more.<\/p>\n Rather than simply reversing Jeremy Hunt\u2019s cut to the bank surcharge from 8% to 3%, the TUC argue that the surcharge \u2013 additional corporation tax \u2013 should be increased further.<\/p>\n That would provide funding to pay for a social energy tariff that brings down energy bills for those on low and middle incomes.<\/p>\n Hiking the surcharge to 16%, they say, would deliver \u00a324bn over four years.<\/p>\n A 35% surcharge, which would be the same level as the windfall tax the Conservatives imposed on energy companies, would yield \u00a360bn over four years.<\/p>\n TUC general secretary Paul Nowak says:<\/p>\n double quotation mark\u201cSome in the finance lobby have tried every which way to stop tax rises in the Budget. But these results make it blatantly obvious banks can afford to contribute more.<\/p>\n \u201cIt\u2019s not just HSBC. Barclays announced bumper profits last week too. And Britain\u2019s big four banks have made more than \u00a3200bn in profit over the last five years.<\/p>\n \u201cWith Trump and Putin\u2019s illegal wars rumbling on, working people have another cold, hard winter ahead. Households and businesses are going to need more support – and it\u2019s time for the Chancellor to make the banks pay a fairer share.\u201d<\/p>\n Share<\/a>NEF: HSBC profits hard to swallow as households face rising costs<\/p>\n HSBC\u2019s jump in profits is prompting fresh calls for new bank taxes in the budget.<\/p>\n As the Guardian reported earlier this month<\/a>, Healey has decided to tap the financial sector for additional revenue. One way would be to reverse cuts to the bank surcharge made by former chancellor Jeremy Hunt \u2013 which would raise upwards of \u00a32bn a year.<\/p>\n Abhijay Sood, economist at the New Economics Foundation, argues that Healey should go further!<\/p>\n double quotation mark\u201cIt\u2019s not surprising that HSBC have made such significant profits in the last quarter, but it will be difficult news to swallow for households struggling with rising mortgage costs. Like other big banks, its profitability has depended on keeping interest rates on savings accounts low, and a \u201cstealth subsidy\u201d from taxpayers via the Bank of England due to quantitative easing.<\/p>\n \u201cWhile the rumours of a bank tax change in the Budget are welcome, it is unlikely to go far enough. While banks are making over a billion pounds a week of profit, NEF analysis suggests that the restoration of the bank surcharge to 8% would raise just \u00a31.8bn a year from them.The chancellor should go further by clawing back the stealth subsidy, and use this to fund inflation-busting investment and keep the essentials of life affordable for ordinary people.\u201d<\/p>\n Share<\/a><\/p>\n Updated at\u00a003.40 EDT<\/p>\n HSBC ‘very encouraged’ by Burnham’s growth agenda HSBC CFO Pam Kaur is speaking to the media now.<\/p>\n On the issue of a bank tax (which John Healey could announce tomorrow), Kaur expresses support for what Andy Burnham\u2019s government are doing, saying:<\/p>\n double quotation mark\u201cWe only have 24 hours to go. We are very encouraged by the government\u2019s growth agenda, particularly how we can lean-in to support not just specific sectors like UK innovation, infrastructure. and the UK trade deals, but also in terms of how we are the connector for the UK with the rest of the world, given the success the government has had with many of these international trade deals.\u201d<\/p>\n But Kaur also said HSBC would have to \u2018respond to customer behaviour\u2019:<\/p>\n double quotation mark\u201cNow, obviously, as our customers make their business investment decisions, we will respond accordingly, because that\u2019s what we do as banks. When the lending demand goes up, we lend more. We are ready with the right risk appetite to do so. We\u2019ll just have to see how businesses and customers react.\u201d<\/p>\n Share<\/a><\/p>\n Announcing today\u2019s financial results, Georges Elhedery, HSBC\u2019s group CEO, said:<\/p>\n double quotation mark\u201cOur performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities.<\/p>\n It also reflects consistent execution of our strategic priorities with pace, precision and discipline.<\/p>\n As we simplify HSBC, we are creating greater capacity to invest, grow and deliver strong returns for our shareholders.\u201d<\/p>\n![\"Kalyeena](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/10\/1793097731_648_Kalyeena_Makortoff,_L.png\")
Kalyeena Makortoff<\/p>\nKalyeena Makortoff<\/p>\nKalyeena Makortoff<\/p>\n