British banks warn of ‘false period of calm’ ahead of Brexit negotiations

Britain’s major banks are set to report stronger-than-expected results this week, confounding expectations that political and economic upheaval caused by the country’s vote to quit the EU would immediately squeeze profits.

Since the vote in June, shares in Royal Bank of Scotland and Lloyds have fallen by about a quarter, partly reflecting their heavy exposure to any downturn in the British economy.

But senior executives from the major banks told Reuters that consumer spending had held up in the third quarter, while there had only been a modest drop in demand for mortgages and business loans — traditionally banks’ big revenue earners.