London, Jan 18, 2026, 08:30 GMT — Market closed.
- UK inflation figures are set for release on Jan. 21 at 0700 GMT. (Gov)
- The Bank of England is set to release its next policy decision and minutes on Feb. 5. (Bank of England)
Lloyds Banking Group plc (LLOY.L) closed Friday’s session at 102.10 pence, slipping 0.1% from the previous close. (Investing)
The move was modest, but bigger shifts could be ahead. With markets closed Sunday, traders are gearing up for Monday’s open, focused on inflation and rate forecasts that directly impact Lloyds’ mortgage pricing and funding expenses.
Rate bets have shifted quietly rather than sharply, with timing playing a key role. Markets currently price in two quarter-point Bank of England cuts this year but only began factoring in a 25-basis-point cut by June, assigning just a 6% chance of a move at the next meeting, according to a Reuters report Friday. “Sterling received a modest leg up on the GDP data news,” said Matthew Ryan, head of market strategy at Ebury. (Reuters)
London shares finished the week largely unchanged, with stock selectors left to dig into the specifics. The FTSE 100 dipped 0.04% to 10,235.29 on Friday, following a record-setting close the day before, Reuters reported. (Reuters)
For Lloyds, the key figure is usually the “net interest margin”—the spread between earnings on loans and the cost of deposits. That margin tends to widen with rising rates, but it can shrink quickly if rates fall and banks start competing more aggressively for deposits.
The bank is painting a cautiously steady picture, at least on the housing front. In a note released Friday, Lloyds homes director Andrew Asaam suggested the Bank Rate might drop to about 3.25%, with mortgage rates settling close to 4%. He warned, though, that a rise in unemployment “could inject some uncertainty.” (Lloyds Banking Group)
Lower mortgage rates usually boost new lending volumes and ease pressure on some borrowers. But they can also pinch returns on existing loans, depending on how fast deposit costs drop and how fiercely banks fight for new clients.
Not all peers ended the week in sync. NatWest Group shares gained 2.16% on Friday, beating the wider market. (MarketWatch)
But the situation works both ways. Higher inflation numbers could delay anticipated rate cuts and dampen mortgage demand, while quicker easing might squeeze bank margins earlier than investors anticipate.
Lloyds is set to release its preliminary results for 2025 on Jan. 29. Investors will be watching closely for updates on margin guidance, credit quality, and capital returns. (Lloyds Banking Group)
