Katie Murray: I think it’s really interesting. So I think, what you’re paying to depositors that you’re handed depends a little bit on market as well, in terms of what the kind of what’s happening elsewhere, when I would say that sort of about 80% of our balances are actually above 25,000. So actually, I think the rates are being passed through are much higher than you probably realize, and the competitive dynamics. And I think, importantly, the system liquidity and what happens is we approach things like TF SME, all kind of play their parts to how this evolves.
Operator: Thank you. Our next question comes from Adam Terelak of Mediobanca.
Adam Terelak: I just had a follow up on deposits. You mentioned in your forward planning assumptions, at Bank of England rate cuts, just an update on how you’re thinking about deposit pricing in the face of cuts given, you’re still, a lot of your products are priced well below Bank of England rates. So could that in terms of numerator going down and the denominator going up, mean that increase in beta even when we’ve kind of got to the end of the rate cycle. Thank you.
Katie Murray: I think the end of the rate cycle is going to be an interesting time. And I think there’s a lot of different things going on. So the moment our rates are looking to sort of mid-2024, that we start to see them come down. We’ve taken probably relatively conservative view on this. In the documentation on the structural hedge, we show you the kind of sensitivity on that we’ve given you a kind of a 60% pass through rather than our historical 50% pass through. And we’ve been you’re kind of 25% up and down. But why would say that if the pass through was kind of 10%, higher or 10% lower that we’d have about on a static balance sheet that would have about a £50 million impact on income. Obviously, that’s an annual number in terms of that piece.
So you can kind of prorate that through. But I really think at the moment, it’s quite early to be talking exactly what that might do to our numbers. But I would guide you back to, for us as a bank is that the sustainable 14% to 16% return. We have clearly built in some views on that. And we remain very comfortable with that as our medium-term view on returns. Thanks.
Operator: Thank you very much. I will now like to hand back to Katie for any closing comments.
Katie Murray: Lovely. Thanks very much. And thanks, everyone for your questions and participation this morning is very much appreciated. We have had a strong performance in H1 is demonstrated the strategy is working. And we have a robust balance sheet growing lending to support our customers. We’re on track to meet our 2023 cost guidance. We’ve distributed £2.5 billion to shareholders in H1. And we continue to target a sustainable medium term royalty of 14% to 16%. And with that, I’ll thank you for your ongoing support. And I look forward to talking to many of you as we meet you over the next couple of weeks. Take care. Thanks. Bye-bye.
Operator: That concludes today’s presentation. Thank you for your participation. You may now disconnect.
