We've approved 80% of all business loan and overdraft requests.
Find out how we can help your business >
With a network of corporate offices across the UK and the world, you can rest assured that we are not only nearby when you need us, but we also have the local knowledge to help your company’s success.
Actionable Insight from the world of financeVisit the website.
Whatever your business goals and ambitions, we are committed to developing a strong working relationship with you and providing you financial solutions, based on understanding your needs.
Terms and Conditions for Products & Services
Our team of economic research experts provide in-depth analysis and reports on topical economic, financial and industry issues.
More information on Lloyds TSB online services
More information on Bank of Scotland online services
EZ/GE/FR/IT GDP (Q1, 1st estimate)
GE ZEW survey (May) US Empire and Philadelphia Fed Survey (May)
US CPI inflation (Apr) US FOMC minutes
BoE Inflation Report (May)
Labour market statistics (Apr/Mar)
• Confirmation of euro area recession to supplement political uncertainty.
• BoE’s Inflation Report to focus on higher inflation as key deterrent to stimulus in May.
• Key US data guides near term outlook, with FOMC minutes in focus.
European elections left their mark on financial markets, with the Bank of England ’s halt to QE also impacting domestic markets. The aftermath of the Greek elections and successive failures to form a government have again raised the prospect of Greece stumbling out of the currency union. Equity markets lost ground and although bond markets are broadly unchanged on the week, mid-week saw new record low yields in ‘core’ economies, while peripheral spreads widened. The euro area will remain the focus of the coming week, although the BoE Inflation Report will provide domestic interest and the US sees a packed calendar.
The European week begins with results from the German State North-Rhine Westphalia election. Chancellor Merkel ’s CDU party is expected to struggle against a resurgent SPD. Yet this could help moderate Germany’s hardline austerity. There are signs of shifting sands across the euro area. The Commission has advocated pushing out Spain’s budget deficit target and conducting an independent banking review. The Bundesbank also acknowledged that German inflation would temporarily be above the euro area average, while Finance Minister Schaeuble discussed above inflation wage increases as alleviating wider euro area pressures. The coming week’s EU finance ministers meetings will discuss additional growth measures. Friday’s G8 Summit in the US could see international pressure brought to bear.
Next week brings first estimates of Q1 euro area GDP. Our global team forecasts an above -consensus euro area outturn, supported by firmer output in Germany. Indeed, recent industrial output and export data look likely to underpin a more resilient than feared German ZEW survey – the first of the euro area’s May business indicators. However, euro area wide GDP data look set to confirm a currency union wide recession, which will add gloomy political backdrop.
Domestically, the Bank of England’s Inflation Report press conference should explain why this downbeat outlook for the euro area, coupled with a UK economy already in recession, did not prompt further stimulus. The conference should focus on higher projected inflation, although in turn this is likely underpinned by a belief in more resilient economic activity than officially reported. The focus on inflation could unsettle interest rate markets that envisage no tightening over the next two years, which could nudge short-end yields higher. We believe growth will underperform the Bank’s February forecasts, and do not expect these to be revised significantly next week. But an eventual down shift in these projections would ease medium-term inflation concerns; reinforce the likelihood of a still distant policy tightening; and open the way for further QE before year-end. This would be exacerbated if tensions in the euro area escalated further.
The US sees a busy calendar. The first of May’s key business surveys may give a clearer directional steer for the economy after recent mixed signals. We expect modest gains in both the Empire and Philadelphia Fed surveys reflecting firmer ISM and NFIB reports recently and in turn boosted by falling gasoline prices. Gas price fal ls should be evident in April’s CPI inflation and retail sales. Minutes to the last FOMC meeting are also scheduled for Wednesday. With several non-voting members advocating policy tightening sooner than the FOMC’s consensus view of end-2014, the minutes should provide a clearer insight into the voting-members’ views. These are likely to maintain that the recovery to date remains modest and that the FOMC stands ready to provide further stimulus if necessary. We remain of the view that this is unlikely in the short-term unless the situation in the euro area unravels significantly.
This document is confidential, for your information only and must not be distributed, in whole or in part, to any person not involved with the proposed transaction without the prior consent of Lloyds TSB Bank plc (“Lloyds Bank”). Whilst Lloyds Bank has exercised reasonable care in preparing this document and any views or information expressed or presented are based on sources it believes to be accurate and reliable, no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. In particular, whilst we have sought to identify appropriate products and to provide guidance as to how those products might operate under various accounting standards we are not, and should not be considered to be, giving an accounting opinion or advice and you should conduct your own independent enquiries and seek your own professional advice in this respect. Any transaction which you may enter into with us will be on the basis that you have made your own independent evaluations based on your own knowledge and experience and any professional advice which you may have sought in relation to all aspects of the transaction including legal, regulatory, tax or accounting.
All terms contained herein, including pricing, are indicative only and subject to change without notice. This material has been prepared for information purposes only and Lloyds Bank, its directors, officers and employees are not responsible for any consequences arising from any reliance upon such information. If you receive information from us which is inconsistent with other information which you have received from us, you should refer this to your Lloyds Bank Sales representative for clarification.
Lloyds Bank, Lloyds TSB Corporate Markets and Lloyds TSB are trading names of Lloyds TSB Bank plc and Lloyds TSB Scotland plc. Lloyds Bank and Lloyds TSB Corporate Markets are trading names of Bank of Scotland plc. Lloyds TSB Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Lloyds TSB Scotland plc. Registered Office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland no. 95237. Bank of Scotland plc. Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. 327000. Authorised and regulated by the Financial Services Authority under registration numbers 119278, 191240 and 169628 respectively.