Shares of major UK banks fell Friday after reports the government will raise the sector-specific surcharge on bank profits to 8% from 3% in Finance Minister John Healey's first budget, due on Oct. 28. Lloyds led losses with a 1.8% drop and NatWest fell 1.51%, while HSBC and Standard Chartered, which earn much of their profit overseas, rose 1.2% and 0.71%. KBW analysts estimated the hike could raise £2 billion ($2.67 billion) a year for the Treasury but could cut 6% from lenders' earnings. Citi said the budget could act as a 'clearing event' for lenders, noting UK banks' total tax rate exceeds 46%, versus 38.9% in Frankfurt.
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