Company: BCS
Filing Date: 2025-04-30
Form Type: 6-K
Source: 0001654954-25-004815
Chunk: 20

Company: BARCLAYS PLC
Filing Date: 2025-04-30
Form: 6-K
Chunk 20
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-offs intensify. UK and US unemployment peaks at 8.4% and 7.5% respectively, during 2026. In order to support the economy, Central banks start to reduce rates. In the Upside 2 scenario, a rise in labour force participation and higher productivity contribute to accelerated economic growth, without creating new inflationary pressures. Central banks lower interest rates stimulating private consumption and investment growth. Demand for labour increases and unemployment rates stabilise and start falling again. As geopolitical 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 US GDP in the Baseline scenario, bringing the Baseline scenario closer to the Upside scenarios. For further details see page 32.

The Group continues to monitor the heightened uncertainty in the near-term macroeconomic outlook, especially in the US. The broadening range of outcomes coupled with a perceived lag in consensus suggests that a greater weighting than that used in the modelled ECL output (see below) should be applied to the Group's Downside scenarios to reflect the macroeconomic uncertainty. In response, a gross £91m uncertainty PMA (a £74m income statement impact net of SRT credit protection 1 ) has been booked in Q125 across the US Consumer Bank (£38m) and the Investment Bank (gross/net SRT 1 £53m/£36m). This adjustment reflects a point in time impact based on the balance sheet as at 31 March 2025 for the uncertainty around macroeconomic variables. It does not factor in future changes in customer utilisation or management actions the Group might take to mitigate credit risk.

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.

| 1 | Significant Risk Transfer (SRT) represents risk transfer 
 transactions used to enhance Barclays’ risk management   
 capabilities.                                            |

| Macroeconomic variables used in the calculation of ECL |       |       |      |      |