There’s still a little way to go, as I indicated in my comments to Raul before we necessarily hit the 50% mark as to whether it then exceeds it over time, I’ll leave Charlie to comment further. But at the margins, it’s not impossible. I think we have to see how things develop. But we’re a little way off that right now. So that’s not a concern for now. It’s not a concern, I suspect, for this year. And indeed, our expectations as to the gathering pace of deposit beta are fully built into our margin expectations for this year, which as you know, and by the way, and importantly to your question, have just increased from greater than 305 basis points to greater than 310 basis points. That partly, I think, answers your questions. I’m going to pause there, hand over to Charlie, and then I’ll come back on TNAV.
Charlie Nunn: Well, actually, William, I think you said — I would have said, strategically, when we gave you this guidance at the start, I think, back 18 months now, my experience from having managed big deposit businesses through multiple rate cycles in the last 10 years is and typically — you typically end up both through people valuing liquidity at the start of a rate cycle, when there’s more uncertainty, they want into access and there’s get more confidence around the economic environment, willing — being willing to ship some of their savings into fixed products. What you typically see is across the whole deposit base about a 200-basis-point spread between the bank base rate and the deposit base. So as we’ve been going through this last couple of years, I think we’ve said a couple of times, a 50% pass-through, which would take two years or three years for our customers to adjust where they’ve got deposits has always been what we thought made sense as we were thinking about rates at 300 basis points or 400 basis points.
The reality is we’re now looking at rates, which are a bit higher, of course is, the real question is how long do they stay at that rate and what are the expectations around it. And especially as you start to think about time deposits, that’s obviously priced based on the one-year or two-year curve, and actually, you could — when we look at our forecast for rates, we’re not going to stay at these highly elevated levels or higher levels for long. So I think the answer is we’re building towards 50 basis points. As William would say, we’ve got some way to go. That’s because customers massively value liquidity and we’ve got such a strong retail franchise and strong transactional capabilities and services. We should continue to expect that to shift.
If we think that the rates and the yield curve and customer behavior is going to push us above that 50% we’ll tell you as we get there. I think what’s good about that from our perspective to the shareholder is if we’re in that environment, we’re going to see ways of optimizing our NIM, and that’s what William just said, despite the higher rates we’re guiding to higher NIM.
William Chalmers: Just moving back to TNAV. On the second, sorry, Rohith, did you want to — go ahead if you’d like to carry on.
Rohith Chandra-Rajan: Yeah. Just going back on that very briefly before we move on to just to clarify these. So mechanically, if we were expecting rates to go from pretty much zero to 300 basis points, that would have been a 50% pass-through, would have been 150-basis-point spread at 5%, that’s 250 basis points. I think, Charlie, what you’re telling us is that, because you don’t expect rates to stay at that very elevated level or elevated level for an ongoing significant period of time that actually the fixed spreads would be lower than that reflecting your expectations of lower rate. Is that the right way to think about those comments?
