Mortgage Giant Predicts No Recession and Lower Interest Rates

The largest mortgage lender in the UK has predicted that the UK will no longer fall into recession next year.

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Lower Mortgage Interest Rates on the Horizon

Lloyds Banking Group benefit from having the most financial data than any other company in the UK; therefore, are a well trusted source. Lloyds also expect the Bank of England base rate will peak at 5.5%, much lower than the estimates of 7% forecast by other firms in the city a few weeks ago.

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UK Economic Growth Forecast

Economic growth is predicted this year, with the UK avoiding recession, whilst unemployment is expected to remain low, providing a more positive outlook.

Lloyds CEO Charlie Nunn commented “economic anxiety has increased, but there is only a small number – perhaps 1% - of customers that are in true distress."  

Lloyds, which owns the Halifax and Scottish Widows, reported half-year profits up 23% to £3.87 billion with a dividend declared of nearly £600m in total. Richard Hunter the Head of Markets at Interactive Investor commented, “Despite something of a slowdown in the second quarter as was largely expected, for the half-year as a whole Lloyds has again shown its financial mettle. Indeed, Lloyds upped a number of guidance measures in its outlook, such as the Return on Tangible Equity number to over 14% from a previous 13%.”

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Positive Outlook for the UK Property Market

With signs of the UK reaching the peak of the Bank of England base rate rises and economic growth as opposed to a recession, there is a hugely positive outlook for the UK market.

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Is UK Property Still a Good Investment?

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