The figures are from investing and trading platform IG, with the rises coming amid speculation that Chancellor John Healey will impose new taxes on banks in next week’s Budget. 

According to the data, NatWest saw the sharpest increase, with sell trades jumping 162%, followed by Lloyds, where short-selling activity rose 85%.

Barclays also recorded a 32% increase in sell trades, while HSBC was the only bank to see a decline, with shorting activity falling 6%.

Angeline Ong, senior technical analyst at IG, said: “Budget speculation is already casting a shadow over Britain’s banks, and investors aren’t waiting until 28 October to react. The sharp rise in selling activity suggests traders are already pricing in the fact that the Chancellor will turn to the banking sector to help plug the fiscal gap.

“Lloyds and NatWest are particularly exposed, given their heavy reliance on the UK market, while Barclays has some protection through its international operations. HSBC is more insulated, and that distinction is becoming increasingly apparent in trading activity.

“The question now is how hard the Chancellor is prepared to hit the sector. If the Government goes too far, it risks punishing the very institutions it needs to support lending, investment and economic growth.”