Lloyds share price soars on hopes of a Brexit deal

Lloyds saw its share price close 16% higher last week, coming close to breaking through 60p levels, with investors growing optimistic about the prospect of Britain securing a last-minute Brexit deal.

British Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar met last Thursday, renewing hope that the UK will reach an agreement with the EU before October 31.

UK banks lifted by prospect of new Brexit deal

Lloyds wasn’t the only British lender to see its stock soar after a new surge of Brexit optimism.

Barclays and the Royal Bank of Scotland (RBS) both saw their shares climb 8% and 12% respectively following the news.

For many years, British lenders have seen their share prices weighed down by fines, increased regulation, an excess of bad loans on their balance sheets and a prolonged low-interest rate environment.

But the possibility of Britain finally leaving the EU with a deal has helped relieve some of the downward pressure on UK lenders’ shares, with further gains likely if a deal is reached in the weeks ahead.

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Brexit: Deal or no-deal

Over the next six days, investors expect to get some clarity over whether a Brexit deal is achievable by October 31, or if another extension is required which will likely delay Britain’s departure date to January 2020.

Despite talks in Brussels over the weekend between the UK and EU negotiating teams, the bloc’s chief negotiator Michel Barnier said that a ‘big gap’ remains over customs arrangements.

How much progress, if any, the two sides have made in securing a Brexit deal will be made clear after the EU summit concludes on Friday.