Company: LLOBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001654954-25-008460
Chunk: 68

Company: Lloyds Banking Group plc
Filing Date: 2025-07-24
Form: 6-K
Chunk 68
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, better representing shocks to demand, and a scenario with higher paths for UK Bank Rate and CPI inflation, as a representation of shocks to supply. The combined 'adjusted' scenario used in ECL modelling is considered to better reflect the risks around the Group's base case view in an economic environment where demand and supply shocks are more balanced.

Scenarios by year

The key UK economic assumptions made by the Group are shown in the following tables across a number of measures explained below.

Annual assumptions

Gross domestic product (GDP) growth and Consumer Price Index (CPI) inflation are presented as an annual change, house price growth and commercial real estate price growth are presented as the growth in the respective indices over each year. Unemployment rate and UK Bank Rate are averages over the year.

Five-year average

The five-year average reflects the average annual growth rate, or level, over the five-year period. It includes movements within the current reporting year, such that the position as of 30 June 2025 covers the five years 2025 to 2029. The inclusion of the reporting year within the five-year period reflects the need to predict variables which remain unpublished at the reporting date and recognises that credit models utilise both level and annual changes. The use of calendar years maintains a comparability between the annual assumptions presented.

NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED) (continued)

Note 12: Allowance for expected credit losses (continued)

| At 30 June 2025                     | 2025 
    % |  2026 
     % |  2027 
     % |  2028 
     % | 2029 
    % |            2025 
 to 2029 average 
               % |
| Upside                              |      |       |       |       |      |                 |
| Gross domestic product growth       |  1.2 |   2.0 |   1.8 |   1.4 |  1.4 |             1.6 |
| Unemployment rate                   |  4.4 |   3.5 |   3.1 |   3.1 |  3.2 |             3.5 |
| House price growth                  |  3.6 |   6.5 |   7.9 |   6.2 |  4.8 |             5.8