Lloyds Banking Group has revealed that its profits rose by a third in the first three months of 2026.
The banking group reported a pre-tax profit of £2bn from January to March, up 33% compared to the same period last year.
The profit figure also exceeded the £1.8bn that most analysts had forecast.
Lloyds Banking Group pre-tax profit in the first quarter of 2026″ data-source=””>
The profits were boosted by an 8% year-on-year increase in revenue generated by the bank, amid growth in customer activity during the quarter, as well as a drop 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 seek to strengthen their financial positions and achieve their goals,” he said.
However, the 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 now forecast slower growth in gross domestic product (GDP) and a rise in the unemployment rate, higher energy prices leading to new inflationary pressures and interest rate cuts expected to be delayed until 2027.
The UK unemployment rate is forecast to rise to 5.6% in the second half of the year, while Consumer Price Index (CPI) inflation could reach 3.9% in the final quarter, according to the bank's forecasts.
