Thursday, January 2, 2025
Finance

Lloyds forecasts drop in defaults as economy improves

Lloyds Banking Group

Lloyds said it expected the economy to grow 0.8% in 2024 – double the rate of growth predicted in April, when it forecasted a 0.4% increase

Lloyds predicts a drop in defaults on loans and mortgages as the UK economy improves, the high street banking giant has confirmed. Lloyds, the UK’s largest mortgage lender, says its finances could improve further if Labour’s growth plans succeed.

Lloyds said it expected the economy to grow 0.8% in 2024 – double the rate of growth predicted in April, when it forecasted a 0.4% increase. We have seen both across individuals and small businesses, positive economic developments, the chief executive, Charlie Nunn, said on Thursday.

There is a real resilience we’re seeing in the first half of the year and it’s linked to now three-quarters of real wage growth. Many businesses’ cashflows are also strengthening. Nunn suggested UK gross domestic product and Lloyds’ finances could improve further if the Labour government’s growth plans succeeded.

Unlocking growth is not easy.  And we’ve been working closely with the government to say what are the things that make a difference, the chief executive added. If we really do get some of the big infrastructure investments, some of the investments in our core sectors such as energy; if we get confidence in small and medium-sized enterprises growing again; and then we get consumers who have confidence to spend, save and invest for the future; if those things happen, that is when we thrive.

Nunn added: In the first six months of 2024, the Group delivered robust financial results with solid income performance and cost discipline alongside strong capital generation. 2024 is a key year for our strategic delivery. We continue to deliver on our strategic transformation, as illustrated in the fourth of our investor seminars last month.

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