The Lloyds (LON: LLOY) share price has been in a recovery mode as investors wait for next week’s interest rate decision by the Bank of England (BOE). The shares are trading at 45.80p, which is about 24% above the lowest level in March this year.
UK economic slowdown
Lloyds Bank is the biggest bank in the UK with a market cap of over 40 billion pounds. As a mostly national bank, it is often seen as a barometer for the UK economy. This is because it has millions of customers and provides essential services like mortgages and credit cards.
The Lloyds share price is rising even after a major warning about the UK economy by the OECD. The organization said that the economic growth will stall in 2023 as inflation remains at elevated levels. As a result, this inflation will squeeze household and corporate incomes. OECD also cited expected tax hikes. The statement added:
“Inflation is high compared with other OECD countries in the G20 . . . that’s one thing. The other thing is there is fast monetary tightening which is obviously responding to [the inflation] and there is fiscal consolidation which is the highest in the G7.”
Lloyds shares also rose even as Credit Suisse became the first European bank to warn about its profitability. The firm issued its third profit warning since January. It also warned that it will accelerate cost-cutting measures in the coming months. Credit Suisse share price crashed to a 20-year low.
Meanwhile, data published by Halifax, a company owned by Lloyds, showed that house prices in the UK were leveling. House prices rose for the 11th straight month although the annual growth slowed for the fourth straight month. This is a notable event since Lloyds aims to become the biggest landlord in the US.
Focus now shifts to the upcoming interest rate decision by the Bank of England (BOE). The bank is expected to push rate hikes by another 0.25% on Thursday next week.
Lloyds share price forecast
The LLOY share price has been in a bullish trend in the past few days. The stock has moved from a low of 42p on May 12th to 45.96p. At the same time, it managed to move above the upper side of the symmetrical triangle pattern that is shown in black.
The stock also moved above the 25-day and 50-day exponential moving averages while the Relative Strength Index (RSI) moved above the key level at 56.85. Therefore, the shares will likely keep rising as bulls target the key resistance at 47.50p.
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