Bank of England PRA Proposes Automatic Indexation of 128 Regulatory Thresholds
The PRA proposes linking 128 banking, insurance and credit union thresholds to nominal GDP, with the first change due in 2031 and consultation open until February 2027.
The story in focus
The Prudential Regulation Authority has proposed that 128 regulatory thresholds across banking, insurance and credit unions increase automatically with nominal UK GDP, replacing manual updates. The first adjustment would occur on 1 July 2031, then every five years, with consultation running from 7 October 2026 to 7 February 2027.
- 128 thresholds would be indexed to nominal UK GDP, published by the Office for National Statistics
- The first update is scheduled for 1 July 2031, with further updates every five years
- The consultation opens 7 October 2026 and closes 7 February 2027
Scope of the proposal
The Prudential Regulation Authority, part of the Bank of England, proposes that 128 regulatory thresholds spanning banking, insurance and credit unions rise automatically with nominal Gross Domestic Product. The thresholds determine which rules apply to firms, how they apply, and what firms must report. The range runs from a £320 billion total assets threshold for detailed capital reporting down to a £7,500 limit on amounts owed to a credit union by an individual. Other thresholds include the size at which an insurer falls under Solvency UK and the total assets threshold for the Small Domestic Deposit Takers regime.
Index choice and timing
The PRA says it selected nominal UK GDP, published by the Office for National Statistics, because it captures both price changes and real economic growth, unlike the Consumer Price Index or real GDP growth. It proposes five-year intervals to balance recurring adjustment costs against responsiveness to economic change. The first update would take place on 1 July 2031. The consultation opened on 7 October 2026 and closes on 7 February 2027. The PRA says it excluded some thresholds, including those jointly owned with the Financial Conduct Authority, and is seeking views on them through a parallel discussion paper.
When would the first automatic threshold adjustment take effect?
The PRA proposes that the first update occur on 1 July 2031, with further updates every five years thereafter, subject to the consultation that closes on 7 February 2027.
Sources & further reading
- Regulatory thresholds set to shift to automatic increases ↗bankofengland.co.uk
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