The bank said that this came after “strong house price growth” in 2022, and digging into its prediction, the trough will occur in the second quarter of next year in its base case scenario. House prices will then start to recover from Q4 2024 onwards.
It added that the base rate forecast has peaked at 5.25% and would start to fall from Q4 next year.
The lender expects inflation to fall more slowly, still standing at above 5% in the last quarter of this year and then falling to close to 4% by the end of next year.
It continued that peak unemployment has been revised down to 5.1% and GDP was expected to strengthen by 0.4% in 2023, compared to 0.2 per cent assumed in Q2.
Profits almost doubled
The lender reported a statutory profit after tax of £4.3bn, which is an increase from £2.9bn in the same period last year or equivalent to a 46% increase.
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Lloyds added that in the third quarter it made around £1.4bn statutory profit after tax, which is up from £494m in the same period last year.
Struggling borrower figures
In terms of those in mortgage difficulty, the group said that its new arrears figures have stayed stable this year with 0.27% in the second quarter and then 0.26% in the third quarter.
It also noted that the new to arrears figures were below the 2019 average of 0.36%.
Lloyds: ‘Focused on supporting customers’
Lloyds group chief executive Charlie Nunn said: “Guided by our purpose, we remain focused on supporting our customers and helping them navigate the uncertain economic environment.
“The group continues to perform well. Robust financial performance and strong capital generation in the first nine months of the year was driven by net income growth, cost discipline and resilient asset quality. This performance allows us to reaffirm our 2023 guidance.”
He added: “As we set out in the first of our four strategic seminars earlier this month, we are successfully executing against our strategic priorities. This supports progress towards our ambition to enable higher, more sustainable returns. Together, it will better position us to deliver for all of our stakeholders as we continue to help Britain prosper.”