LONDON, March 11, 2026, 14:48 GMT
Lloyds Banking Group stock dropped under 99 pence in mid-afternoon London trading this Wednesday, erasing some of Tuesday’s gains. Investors digested the new buyback while grappling with uncertainty over UK rates and mortgages. Shares stood at 98.14 pence as of 14:27 GMT, after Tuesday’s 4.1% jump to a 99.02 pence close.
This is significant: Lloyds, the UK’s top mortgage lender, sits at the heart of London’s big interest rate trades. Lately, shifts in oil, movements in gilt yields, and changes in swap rates—the benchmarks for most fixed-rate loans—are landing directly in mortgage pricing.
On Monday, British banks yanked 308 mortgage products from the market—marking the largest single-day drop since the 2022 mini-budget turmoil, according to Moneyfacts. “A sharp and sudden adjustment,” is how Adam French, head of consumer finance at Moneyfacts, described the move, blaming swiftly rising swap rates. Nicholas Mendes, mortgage technical manager at John Charcol, warned a fresh round of withdrawals or price changes might hit “over the coming days.” Reuters
Expectations for Bank of England rate cuts keep drifting. Standard Chartered and Morgan Stanley have delayed their forecasts for the first move, now eyeing the second quarter. According to LSEG data cited by Reuters, traders are putting the odds of a rate hold at 98% for the March 19 meeting.
Lloyds hit the tape Tuesday with a new update, announcing it repurchased 6.23 million ordinary shares for cancellation at a volume-weighted average of 98.6964 pence each. The buyback trims the total share count, a move aimed at lifting earnings per share.
The repurchase forms part of the £1.75 billion buyback Lloyds announced following January’s stronger-than-anticipated 2025 pretax profit of £6.7 billion. The bank also raised its target for 2026 return on tangible equity, aiming for above 16%.
“our continued business momentum and strategic delivery enable us to upgrade guidance,” CEO Charlie Nunn said at the time. Barclays and NatWest bumped up their own forecasts soon after, highlighting that UK lenders are heading into 2026 with heftier capital buffers and greater flexibility for cash returns. Reuters
The near-term outlook remains tricky. According to Hal Cook, senior investment analyst at Hargreaves Lansdown, a jump in oil prices is likely to keep UK inflation running hotter than forecast, making rate cuts look improbable. Meanwhile, the sector is still dealing with the fallout from Lloyds’ motor finance compensation.
Lloyds finds itself caught between ramping up buybacks and building up capital buffers, set against the backdrop of UK mortgages repricing more rapidly. Looking ahead, the Bank of England’s March 19 meeting looms large, with attention on whether lenders continue to tweak or withdraw mortgage deals in the run-up.
