Despite the best efforts of Lloyds and GlaxoSmithKline to drive the FTSE 100 forward, the UK stock benchmark slipped 0.3% to 7,232 because of negative movements from index heavyweights Royal Dutch Shell and HSBC.
Lloyds beat forecasts with its latest quarterly results, helped by the release of more cash that had been set aside for pandemic-related bad debts as well as a strong performance with mortgage lending.
“Investors have been warming to banks in recent months in hope that rising inflation will prompt higher interest rates, which in turn provides more opportunities for lenders to increase earnings,” said AJ Bell’s Russ Mould.
“The European Central Bank will update the market later today and investors will be looking for any shift in thinking with regards to inflationary pressures. Slowing economic growth and a rising cost of living are big concerns to the market, but the message from central banks in general has been that the current spike in inflation will be short-lived.”