LLOYDS Banking Group is expected to report flat profits this week as bosses at the lender brace themselves for questions on the impact of Brexit and economic uncertainty.

City analysts forecast the bank will post pre-tax profits of £2.05 billion in the first quarter, up slightly from the £2bn recorded in the same period last year.

But as the biggest bank on the British high street, and the country’s biggest mortgage lender, attention will centre on Brexit, with Lloyds’ bosses expected to be questioned on their views.

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Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “Lloyds is something of a Brexit barometer.

“One component of cost we’ll be watching closely is impairments due to bad loans.

“UK employment and wages have held up fairly well so far, but increased credit card and car finance activity means a downturn would hit Lloyds’ books pretty quickly.”

Consensus impairment forecasts currently stand at £292 million.

At the firm’s full-year results in February, Lloyds shrugged off concerns about the impact of Britain’s EU departure on the bank as it unveiled an increase in annual profits and delivered a bumper

pay-out for shareholders.

But its peer Royal Bank of Scotland has started to feel the effects of Brexit, with the lender flagging that businesses in particular are reining in spending as fears linger.

“With its [Lloyds’] business predominately in the UK and the biggest mortgage provider, any comment on the effects of Brexit will be of interest,” the Share Centre added.

Lloyds is in the midst of a three-year strategic plan which will see the bank invest more than £3bn and focus on boosting its digital capabilities.

This includes its “biggest-ever investment in people” as it looks to increase staff training and development as it embraces new technology.

However, chief executive Antonio Horta-Osorio has recently refused to rule out further job cuts as the lender overhauls its IT system.

The high street lender has announced nearly 10,000 job cuts since the UK Government sold off its stake to take it fully private in May 2017.

The results announcement will come ahead of the Lloyds AGM in May, where pension pay-outs for top bosses are expected to be put under the microscope.