BoE Policy Announcement and Lloyds Results in Focus on Thursday

The Bank of England's policy announcement and Lloyds Banking Group's half-year results are set to be major focuses for investors on Thursday.

Lloyds has delivered double the return of the FTSE 100 so far this year, and its shares are trading near multi-year highs. Analysts at AJ Bell expect the bank to outline new medium-term targets, including its capital allocation plans following the Bank of England's proposal to relax capital buffer rules.

The BoE is widely expected to keep interest rates unchanged at 3.75%, but a recent rise in energy prices poses a fresh dilemma for policymakers. Economist James Smith noted that while the bank's inflation forecasts are likely to show inflation peaking between 3.5-4%, these projections do not account for current energy costs, which would likely push inflation even higher.