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Senior bank bosses warn UK in ‘false period of calm’

Senior executives from Britain’s major banks, due to report resilient trading results this week, warn the UK may be in a ‘false period of calm, before the storm’.

Speaking to Reuters,  bank heads said consumer spending had held up in the third quarter while mortgages and business loans, a major driver of revenues, had only suffered a modest decline.

While results from Lloyds, Barclays, Santander and RBS are anticipated to paint a stronger-than-expected picture of the health of UK banking, executives are braced for tougher economic conditions once the formal process to leave the EU is triggered no later than March next year.

One senior executive said: “This is a period of calm, maybe a false period of calm, before the storm. But don’t be fooled by it.”

This week kicks off the first round of major bank reporting since the referendum vote was returned in June. The Council of Mortgage Lenders (CML) reported a strong August for both homeownership lending and the volume of loans advanced. Banks and building societies advanced £12.2bn of homeownership loans, a 14% increase on July, converting to 66,000 mortgages, or a monthly rise of 13%.

Lloyds Banking Group and Santander’s third quarter results are set to be published on Wednesday, Barclays on Thursday with Royal Bank of Scotland on Friday.

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