Lloyd share price has enjoyed a stellar year of performance as the bank bounces back from the pandemic-induced market volatility and economic strife.

Lloyds shares are up roughly 35% YTD at 49p, having dipped from their 52-week highs around 51.5p. However, this is still some way off their pre-pandemic highs and bulls could view the recent dip as an opportunity to pick share up.

If you are bullish on the Lloyds share price, here’s three reasons you may want to buy Lloyds shares now.

Increasing interest rates

Although though the Bank of England is yet to deliver a rate hike, the market is pricing a steady increase in rates over the next 12 months.

Futures traders have priced in a hiking cycle starting with the first increase in December continuing to a 1% Bank Rate by June next year.

Soaring inflation has left the Bank Of England with little choice but to hike rates given a robust UK employment market, an economic indicator the BoE said they were keen to see improve before moving on rates.

Higher interest rates traditionally boosts the Net Interest Margins of banks, and with it the profitability of UK banks, including Lloyds.

Strong UK housing market

Lloyds is the UK’s largest mortgage lender and enjoyed the benefits of their market position in Q3 as profits rose to £2 billion for the quarter. This is largely driven by strength in their mortgage business that rose by £2.7 billion in the last quarter and totalled £15.3 billion.

As the UK’s largest lender, ongoing resilience in the UK housing market will support further Lloyds earnings growth by continually increasing their open mortgage book and keeping a lid of defaults.

Despite government support through Stamp Duty reductions ending some months ago, house prices have remained strong, although mortgage applications has trended down throughout the year.

Lloyds share price technicals

Lloyds shares have began the form a series of higher lows over the past month which are consistent with the key features of an uptrend.

In the very short term, the Lloyds has formed a base around 49p which will be crucial to whether Lloyds shares can revisit recent highs around 51.5p.

Assuming this level is held, a move through 50.4p will open up a test of the 52-week high, which once broken will see little resistance to the Lloyds share price as it moves towards the pre-pandemic trading range 60p-64p.

United Utilities have once again increased their payouts to investors through an increase in the ordinary dividend, but does so at a time inflation squeezes the company’s earnings.

United Utilities reported an increase in revenue to £932.3m in the six months ended 30th September, up from £894.4m in the same period last year.

This helped increase operating profit by 4.4% to £332.8m but underlying earnings per share fell to 28.4p from 29.2p as increased costs on inflation-linked debt eroded the bottom line.

Despite pressure on earnings, United Utilities increases their interim dividend by 0.6% to 14.50p.

“The return to the office meant United Utilities saw overall consumption rise. While fewer people at home meant residential revenue was down, it remained above pre-pandemic levels suggesting this hybrid-homeworking environment will be a net positive for UU,” said Laura Hoy, Equity Analyst at Hargreaves Lansdown.

“However, inflation took a bite out of profits in more ways than one. The group saw core costs rise and is expecting this trend to continue through to the full year. More concerning was an increase in net finance costs. A portion of United Utilities’ debt is linked to inflation, and the sharp increase in consumer prices this year meant it rose substantially. This burden together with a one-time tax charge meant the group’s bottom line was in the red.”

“This isn’t necessarily a long-term trend to worry about. If inflation does ease as many are predicting, this should be a blip on the radar. And in any case the group’s revenues should be inflation linked. However if this new level is sustained it will chip away at United Utilities’ balance sheet.”

United Utilities CEO, Steve Mogford, highlighted the real terms reduction in household bills when taking into consideration inflation and provided comment on their push to net zero by 2030.

“At a time when many families are struggling with a higher cost of living, we have reduced typical water bills forhouseholds in our region by 6 per cent in real terms over the last two years. We’re also offering more help thanever before for vulnerable customers and households that are struggling to pay,” said Steve Mogford.

“Climate change and population growth are challenges we must all confront, and we will continue to invest tomake our services more resilient and strengthen our ability to respond to, and recover from, extreme weather events. Our £2 billion investment programme will also help our region’s economy to grow, generate jobs anddevelop skills in our communities.”

“We’re committed to delivering our six carbon pledges, which will help us achieve our ambition of net zero by 2030. We have already delivered our pledge to source 100 per cent of our electricity from renewable sources. As well as reducing our carbon footprint, we are committed to protecting the natural environment and ensuring no net loss of biodiversity.”