The Lloyds share price will be in the spotlight on Thursday as the Bank of England (BOE) concludes its two-day meeting. The LLOY stock has risen from this month’s low of 41.2p to the current 44p. Other UK banks like Barclays and NatWest have also risen. Similarly, the HSBC share price will likely rise as investors hope for Evergrande restructuring rise.
BOE interest rate decision
Lloyds Bank is primarily a UK banker unlike other banks like Barclays, HSBC, and Standard Chartered that have a large international presence. Therefore, the bank is often exposed to the domestic situation in the UK.
The key catalyst for the LLOY share price today will be the BOE interest rate decision that will happen at mid-day. With the UK economy recovering well, analysts believe that the central bank will start sounding dovish.
The BOE will leave interest rates unchanged at 0.10%, where they have been in the past few months. It will also leave its quantitative easing policy intact. At the same time, the bank will likely provide signals that it will start tapering its asset purchases soon. Some analysts also expect that the bank will provide signals about when it will start hiking interest rates.
The BOE decision comes shortly after the Fed delivered its hawkish decision. The Fed said that tapering will likely happen in the coming year while more officials expect it to hike rates in 2022. In theory, the Lloyds share price should do well if the BOE sounds hawkish.
Lloyds share price forecast
The daily chart shows that the LLOY share price has been in a tight range recently. It is about 12% below the highest point this year. It has formed a descending triangle pattern, which is usually a bearish sign. It is also along the 25-day moving average while the MACD is below the neutral level.
Therefore, for now, I suspect that the stock will remain in the current range regardless of the BOE decision. In the longer term, we can’t rule out a situation where the stock declines below the support at 41.2p.