Following the chancellor’s speech, the futures market is expecting the Bank of England to raise rates above 6% by May 2023. The last time they were that high was the late 1990s.
It’s hard to imagine now, but in 1997 Lloyds Bank (now Lloyds Banking Group, LSE: LLOY) reported a post-tax return on equity (ROE, a key gauge of profitability) of 40%. Today, investors are excited about the bank raising its ROE forecast from 10% to 13% at its half-year results.
Analysing what has changed, and what hasn’t, is instructive. A quarter
