Lloyds Bank has issued figures showing a 28% profits plunge for the first quarter of the year - but it nonetheless has good news for the housing market.
It forecasts that the Bank of England will cut base rate three times by the end of the year, starting over the summer; this is despite Lloyds and other major lenders increasing their rates this week.
It has changed its mind on house prices, too, which it now expects to rise across the UK by an average 1.5% this year; this replaces its previous prediction of a 2.2% fall
Chief financial officer William Chalmers says there’s a “more benign economic outlook” with the housing market proving more resilient than expected.
It also says unemployment will stay low – good news since Lloyds is seen as a proxy for the performance of the wider UK economy.
Lloyds reassured the City by saying results this year would be in line with expectations, though profit margins will fall to 2.9% from 3.22%.
Lloyds announced in January it planned to cut some 1,600 jobs as it shifts its business towards online banking.
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