 share price rallied on Thursday, following the release of Bank of England minutes suggesting the MPC were closer to tightening monetary policy){kind=link}
Lloyds (LON:LLOY) share price rallied on Thursday, following the release of Bank of England minutes suggesting the MPC were closer to tightening monetary policy than the market was pricing in.
UK inflation hit 2.9 percent this week putting pressure on monetary policy voters to increase rates given the resilience of the UK after the decision to leave the E.U.
In the hour following the announcement shares in Lloyds rose over 1 pence to trade at 65.71, up 1.2 percent on the day. Lloyd’s share price hit intra-day lows of 62.2p on 4th September as the UK banking sector posted broad based declines.
High rates are typically good for banks who enjoy higher margins during a period of higher interest rates.
Despite recent declines, some analysts are still positive on the outlook for Lloyds. RBC Capital Markets recently reiterated their Outperform stance on Lloyd’s with a price target of 90p.
Lloyds has been dogged by continued provisions for the PPI scandal which has tarred an otherwise solid recovery in underlying earnings. In the half year to 30th June 2017 underlying profits rose 8 percent to £4.5 billion.
“Following the successful transformation of the Group to become a simple, low risk, UK focused retail and commercial bank, we have delivered another strong set of results with increased underlying and statutory profit and strong capital generation, whilst completing the acquisition of MBNA and returning to full private ownership”, CEO Antonio Horta-Osorio said of Lloyds’ recent progress.