Lloyds Banking Group PLC (LON:LLOY ) has been tipped as one of the potential winners if inflation returns in earnest by analysts at Credit Suisse.
In a strategy note looking at opportunities from rising inflation expectations, the Swiss bank suggests the European bank sector is the most correlated, is more cyclical than normal, is inexpensive on all measures and is seeing headwinds diminish.
Lloyds, UBS and Santander are Credit Suisse's top picks across the sector.
The UK bank though is seen as the one that should benefit most from the cyclical driver of higher interest rates while the others' appeal is more structural.
“Rates are expected to remain negative in Europe until 2026 but market-implied forwards suggest the BoE will hike much sooner.”
Shares in Lloyds edged up to 43.46p.