Lloyds Bank says it expects mortgage rates to remain broadly stable for the short term after the volatility of the past two years.

In the bank’s half year results – which showed a 14% profits slide overall, although with an uptick in more recent months – chief executive Charlie Nunn stated that future Bank of England rate cuts were already priced into many current mortgage offers.

The group – comprised of Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows – reported statutory pre-tax profits of £1.7 billion in the second quarter, just above market expectations that the result would be broadly flat year on year at £1.6 billion.

Loans to customers increased by £2.7 billion during the first half of 2024, driven mostly by growth in retail lending including mortgages and unsecured loans. But deposits at Lloyds’ commercial bank fell £1.6 billion, with a decline in lending to small and medium-sized businesses.

The bank said it had set aside lower provisions for bad loans in the second quarter because of improvements in the UK’s economic outlook and customers’ “resilient credit performance”. It also saw a reduction in rrnew arrears and defaults across its mortgage book, and “stable” arrears and default levels in its unsecured lending book.