Three of Britain’s largest banks are expected to report strong profits this week, despite the downturn.
The effects of the household squeeze will be examined using data from Lloyds, Barclays, and NatWest.
Low consumer confidence could reduce demand for credit, and there are signs that the housing market is slowing down.
Lenders’ profits are more likely to rise as interest rates rise because they have the opportunity to make more money off borrowers.
An analyst at Shore Capital, Gary Greenwood, said that a ‘huge rise’ in bad loan charges was not to be expected due to banks’ increased risk-aversion since the financial crisis.
Barclays could face further consequences from the US blunder. It already admitted that it has sold structured products worth billions more than was permitted.
As it purchases back securities, it has already taken a £450million loss. A recent report indicated that volatility in the US stock market would make it more expensive.
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