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Lloyds Banking Group has revealed its earnings jumped by a third in the first three months of 2026.
The banking group reported a pre-tax profit of £2 billion for January to March, up 33% compared with the same period last year.
The earnings figure also came in ahead of the £1.8 billion that most analysts had been forecasting.
Lloyds Banking Group's pre-tax profit in first quarter of 2026" data-source="">
Earnings were boosted by an 8% year-on-year increase in income generated by the bank, amid growth in customer activity during the quarter, as well as a dip in its operating costs after making savings.
Lloyds chief executive Charlie Nunn said the banking group’s business model was “resilient in the context of the current economic uncertainties”.
“We remain focused on supporting UK households and businesses as they look to strengthen their financial positions and achieve their goals,” he said.
However, new economic forecasts published by the bank reflect the possible “stagflationary consequences for the global and UK economies” of recent events including the war in the Middle East.
Stagflation refers to rising inflation at the same time as slower economic growth.
Lloyds said it was now forecasting a slower increase in gross domestic product (GDP) and a rise in the unemployment rate, higher energy prices leading to renewed inflationary pressures, and cuts to interest rates expected to be delayed until 2027.
The UK unemployment rate is projected to rise to 5.6% by the second half of the year, while Consumer Prices Index (CPI) inflation could hit 3.9% by the final quarter, according to the bank’s forecasts.