Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 287

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 287
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 Russia and Ukraine, which further disrupt energy and food supplies; and – continued differences between the US and China, which could affect economic confidence, and the global goods trade and supply chains for critical technologies. High inflation and higher interest rates also remain key risks. Should tariffs increase significantly and geopolitical tensions escalate, energy and food prices could rise and increase pressure on household budgets and firms’ costs. Higher inflation and labour supply shortages could also trigger a wage-price spiral and put sustained pressure on household incomes and corporate margins. In turn, it raises the risk that central banks react by raising interest rates, leading to higher defaults and an economic recession.

| HSBC Holdings plcAnnual Report on Form 20-F | 183 |

The consensus Downside scenario In the consensus Downside scenario, economic activity is weaker compared with the Central scenario. In this scenario, GDP declines, unemployment rates rise, and asset prices fall. The scenario features an increase in tariffs over and above those assumed in the Central scenario and an escalation of geopolitical tensions, which causes a rise in inflation, as supply chain constraints intensify and energy prices rise. The scenario also features a temporary increase in interest rates above the Central scenario, before the effects of weaker consumption demand begin to dominate and commodity prices and inflation fall again. The following tables describe key macroeconomic variables in the

consensus Downside scenario.

| Consensus Downside scenario 2025–2029 (as at 4Q24) |      |       |      |       |           |       |                |       |        |       |      |       |        |       |
|                                                    |   UK |       |   US |       | Hong Kong |       | Mainland China |       | France |       |  UAE |       | Mexico |       |
| GDP level (%, start-to-trough)1                    | -1.0 | -4Q26 | -0.6 | -3Q25 |      -4.5 | -4Q25 |           -2.5 | -3Q25 |   -0.6 | -1Q26 |  0.3 | -1Q25 |   -2.1 | -4Q26 |
| Unemployment rate (%, max)2                        |  6.1 | -4Q25 |  5.3 | -3Q25 |       5.1 | -2Q26 |            6.9 | -4Q26 |    8.3 | -3Q25 |