Company: BCS
Filing Date: 2025-02-13
Form Type: 6-K
Source: 0001654954-25-001446
Chunk: 32

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 6-K
Chunk 32
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 tensions ease, low inflation supports consumer purchasing power and contributes further to a healthy GDP growth. The strong economic outlook and lower interest rates provide a boost to house prices growth and support bullish financial markets.

The methodology for estimating scenario probability weights involves simulating a range of future paths for UK and US GDP using historical data with the five scenarios mapped against the distribution of these future paths. The median is centred around the Baseline with scenarios further from the Baseline attracting a lower weighting before the five weights are normalised to total 100%. The increases in the Upside scenario weightings were driven by the improvement in GDP in the Baseline scenario, bringing the Baseline scenario closer to the Upside scenarios. For further details see page 46.

Economic uncertainty adjustments of £78m (2023: £198m) have been applied as overlays to the modelled ECL output. Previously held uncertainty adjustments reflecting affordability concerns have significantly reduced during the year, informed by moderated risk from macroeconomic outlook and resilient credit performance in UK retail lending.

The following tables show the key macroeconomic variables used in the five scenarios (5-year annual paths) and the probability weights applied to each scenario.

| Macroeconomic variables used in the calculation of ECL |      |       |      |      |      |
| As at 31.12.24                                         | 2024 |  2025 | 2026 | 2027 | 2028 |
| Baseline                                               |    % |     % |    % |    % |    % |
| UK GDP1                                                |  1.0 |   1.4 |  1.5 |  1.6 |  1.5 |
| UK unemployment2                                       |  4.3 |   4.4 |  4.5 |  4.4 |  4.4 |
| UK HPI3                                                |  2.8 |   3.3 |  1.6 |  4.5 |  3.0 |
| UK bank rate6                                          |  5.1 |   4.3 |  4.0 |  4.0 |  3.8 |
| US GDP1                                                |  2.7 |   2.0 |  2.0 |  2.0 |  2.0 |
| US unemployment4                                       |  4.1 |   4.3