HSBC has reported a 32% rise in third-quarter profit, adding fresh pressure to the debate over whether Britain's biggest banks should face higher taxes in the upcoming UK Budget.

The banking group reported quarterly profit of $9.6 billion, although the result fell slightly short of analyst expectations. Lower operating expenses and a reduction in legal provisions helped lift earnings, according to reports published on 27 October.

HSBC also announced $2.7 billion in shareholder returns, including a $1 billion share buyback and an interim dividend. Despite the profit increase, its shares fell more than 6% in early trading, reflecting investor concerns about the outlook for inflation, economic growth and the banking sector.

The results come as the UK government prepares its Budget, with business groups and campaigners debating whether banks should contribute more through taxation. The Trades Union Congress has called for a higher bank surcharge, while financial institutions argue that policy should support investment, lending and economic growth.

The figures underline the contrast between strong bank earnings and pressure on households and businesses facing borrowing costs and uncertain economic conditions. The Budget could provide further clarity on the government's approach to bank taxation.