Lloyds Banking Group today made a big increase to the amount it will need to cover motor finance mis-selling compensation.
The size of the extra provision “reflects the increased likelihood of a higher number of historical cases” dating back as far as 2007.
Meanwhile, Wall Street markets are set for a stronger session after Friday’s tariffs-led sell-off.
FTSE 100 Live Monday
- Lloyds ups redress provision
- Mortgage rates rise
- Shawbrook confirms IPO
Market update: Miners lift FTSE 100, Lloyds shares up after redress update
10:05 , Graeme EvansAn additional £800 million provision for car finance redress today failed to stop Lloyds Banking Group joining the risers in a robust FTSE 100 index.
The lender lifted the total figure to £1.95 billion after the Financial Conduct Authority last week published details of its proposed compensation scheme.
The banking group said it will be challenging the watchdog’s plans, which it thinks overestimate the amount of compensation that customers need.
Lloyds rose 1.3p to 84.2p amid relief that the provision, which covers operational costs, remains within the £1 billion-£2 billion previously forecast in the City.
The FTSE 100 index rose 9.90 points to 9437.37, reflecting expectations for a Wall Street recovery after Friday’s worst session since April.
The S&P 500 is seen more than 1% higher, having slumped 2.7% on Friday when President Trump threatened 100% tariffs on China in a row over controls on rare earth mineral exports.
He wrote on his Truth Social account yesterday: “Don’t worry about China, it will all be fine!”.
The uncertainty caused a fresh surge in the price of gold, which today stood at a record high of $4078 an ounce.
Endeavour Mining and Fresnillo rose by 5% at the top of the FTSE 100 index, with Anglo American and Antofagasta among the other commodity sector risers after strong China trade figures boosted the mood.
On the fallers board, AstraZeneca faded 82p to 12,700p after Friday evening’s White House announcement of a deal lowering the cost of the company’s medicines for US patients.
Defence stocks also drifted, with Babcock International down 2% or 27p to 1202p and BAE Systems off 37p to 1945.5p.
Heathrow reports busiest September
09:19 , Graeme EvansHeathrow airport today reported its busiest ever September after nearly 7.4 million passengers travelled through its four terminals.
The increase of 0.8% on a year earlier came despite the Collins Aerospace IT issue that impacted airline systems across Europe.
The figure for the year to date is 63.3 million, an increase of 0.3% on the year before.
Miners lifts FTSE 100, Lloyds shares rally despite provision
08:26 , Graeme EvansLloyds Banking Group shares today rose after its new provision for car finance redress just about stayed within the City’s previous estimate of £1 billion-£2 billion.
The lender lifted a penny to 83.9p, compared with the broadly flat performances by NatWest and Barclays.
The FTSE 100 index recovered from Friday’s 0.9% fall by lifting 15.52 points to 9442.99.
A strong session for commodity prices meant mining stocks drove the performance, with Enderavour Mining up 5% or 146p to 3234p and Anglo American 66p stronger at 2946p.
AstraZeneca shares added 98p to 2880p as investors responded to Friday’s White House deal lowering the cost of the company’s medicines for US patients.
GSK shares were flat at 1624p.
Aviva shares rose 4.1p to 676.5p after RBC analysts gave the insurer an Outperform recommendation and 800p target price.
Average mortgage rate rises for first time since February
08:11 , Graeme EvansAverage fixed rate mortgage deals have risen for the first time in over six months, figures showed today.
Although small, the increases mark an unwelcome new direction for the home loans market after rates fell through most of 2025 in anticipation of a succession of rate cuts from the Bank of England.
According to analysts Moneyfacts, average rates on two and five year deals both rose by 0.02% to 4.98% and 5.02% respectively in October. The last month-on-month rate rise was recorded at the start of February.
S&P 500 seen higher after latest Trump comments
07:51 , Graeme EvansUS markets suffered their worst session since April on Friday after President Trump threatened a further 100% tariff rate on China in response to controls to rare earth mineral exports.
He later seemed to backtrack, writing on his Truth Social account yesterday: “Don’t worry about China, it will all be fine!”. He said that the US wants to “help China, not hurt it”.
XTB research director Kathleen Brooks said his comments did not suggest that there has been a solution to the latest trade spat between China and the US.
She added: “Instead Trump appears to be suggesting that financial markets have overreacted to his threat of 100% tariffs.
“Thus, even if there is a stock market recovery today, investors could still remain edgy this week and continue the sell off if the situation deteriorates.
“The TACO trade, ‘Trump Always Chickens Out’, fuelled the recovery rally in April, so if it looks like the same will happen again, then we could see markets absorb Trump’s tariff threats relatively quickly, and volatility could retreat at the start of this week.”
The S&P 500 index is seen about 1.3% higher ahead of today’s opening bell.
Shawbrook confirms London IPO plan
07:35 , Graeme EvansDigital bank Shawbrook today confirmed plans to float next month in what is set to be the biggest London market listing so far this year.
Shawbrook, which lends to small and medium-sized businesses, said it aims to raise £50 million through the sale of new shares. It will also sell shares held by its existing private equity backers BC Partners and Pollen Street Capital.
Shawbrook also said its loan book continued to grow strongly and now stood at £18.3 billion, compared with £17 billion at the end of June.
The listing move, which comes after Friday’s IPO confirmation by Princes Group, is reportedly set to value the specialist lender at £2 billion.
Lloyds lifts car loan provision, criticises FCA proposals
07:12 , Graeme EvansLloyds Banking Group today disclosed it is setting aside an additional £800 million to cover the cost of motor finance redress.
The move takes its total provision to £1.95 billion, which covers operational costs.
The lender said the move reflects the increased likelihood of a higher number of historical cases being eligible for redress, including those dating back to 2007.
The update follows last Tuesday’s FCA consultation paper on motor finance redress, which pointed to an overall industry cost of about £11 billion.
Lloyds warned last week that the proposals pointed to the need for an additional provision, which it added “may be material”.
It added today: “The group remains committed to ensuring customers receive appropriate redress where they suffered loss, however the group does not believe that the proposed redress methodology outlined in the consultation document reflects the actual loss to the customer.
“Nor does it meet the objective of ensuring that consumers are compensated proportionately and reasonably where harm has been demonstrated.”
US stocks seen higher after Friday slump, gold price up 1%
07:05 , Graeme EvansUS stock market futures are higher and the FTSE 100 index is set for a steady session after President Trump softened his comments on China tariffs.
On Friday, the Dow Jones Industrial Average fell 1.9% and the S&P 500 index declined by 2.7% after Trump threatened to impose huge new tariffs amid a critical minerals dispute.
Magnificent Seven stocks Nvidia and Amazon fell 4%, while Arm Holdings reversed 9%. The FTSE 100 index closed down 0.9% at 9,427.47, having earlier traded as high as 9519.96.
Asia markets are in the red, with Hong Kong’s Hang Seng index more than 2% lower.
Futures trading points to an improved session on Wall Street, with the S&P 500 index seen more than 1% higher.
Gold is up by more than 1% at $4067 an ounce, while the price of Brent Crude has lifted 1.5% to $63.65 a barrel.
