In September 2025, global inflation rates and central bank interest rates showed significant variation across major economies. Most economies initiated interest rate cuts from mid-2024 due to declining inflationary pressures. The U.S., UK, and EU central banks followed a consistent pattern of regular rate reductions throughout late 2024. In September 2025, Russia maintained the highest interest rate at 17 percent, while Japan retained the lowest at 0.5 percent. Varied inflation rates across major economies The inflation landscape varies considerably among major economies. China had the lowest inflation rate at -0.3 percent in September 2025. In contrast, Russia maintained a high inflation rate of 8 percent. These figures align with broader trends observed in early 2025, where China had the lowest inflation rate among major developed and emerging economies, while Russia's rate remained the highest. Central bank responses and economic indicators Central banks globally implemented aggressive rate hikes throughout 2022-23 to combat inflation. The European Central Bank exemplified this trend, raising rates from 0 percent in January 2022 to 4.5 percent by September 2023. A coordinated shift among major central banks began in mid-2024, with the ECB, Bank of England, and Federal Reserve initiating rate cuts, with forecasts suggesting further cuts through 2025 and 2026.

United Kingdom UK: Risk Premium on Lending: Lending Rate Minus Treasury Bill Rate data was reported at 0.120 % pa in 2014. This records a decrease from the previous number of 0.199 % pa for 2013. United Kingdom UK: Risk Premium on Lending: Lending Rate Minus Treasury Bill Rate data is updated yearly, averaging 0.280 % pa from Dec 1967 (Median) to 2014, with 48 observations. The data reached an all-time high of 1.995 % pa in 1972 and a record low of -2.372 % pa in 1974. United Kingdom UK: Risk Premium on Lending: Lending Rate Minus Treasury Bill Rate data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s United Kingdom – Table UK.World Bank.WDI: Interest Rates. Risk premium on lending is the interest rate charged by banks on loans to private sector customers minus the 'risk free' treasury bill interest rate at which short-term government securities are issued or traded in the market. In some countries this spread may be negative, indicating that the market considers its best corporate clients to be lower risk than the government. The terms and conditions attached to lending rates differ by country, however, limiting their comparability.; ; International Monetary Fund, International Financial Statistics database.; ;

Acquiring and retaining customers is likely the most critical driver for any bank looking to disrupt the market. Between 2018 and 2022, Starling Bank successfully attracted customers away from other UK banks. However, in 2023, Starling Bank saw negative customer growth, with more customers leaving the bank than new ones joining. This trend reversed in the first half of 2024. While customer acquisition remained below the levels seen from 2018 to 2022, Starling Bank began to see positive customer growth again for most of 2024. In the first quarter of 2025, the bank experienced negative growth once more, with a value of ****.

In June 2024, the European Central Bank (ECB) began reducing its fixed interest rate for the first time since 2016, implementing a series of cuts. The rate decreased from 4.5 percent to 3.15 percent by year-end: a 0.25 percentage point cut in June, followed by additional reductions in September, October, and December. The central bank implemented other cuts in the first half of 2025, setting the rate at 2.15 percent in June 2025. This marked a significant shift from the previous rate hike cycle, which began in July 2022 when the ECB raised rates to 0.5 percent and subsequently increased them almost monthly, reaching 4.5 percent by December 2023 - the highest level since the 2007-2008 global financial crisis. How does this ensure liquidity? Banks typically hold only a fraction of their capital in cash, measured by metrics like the Tier 1 capital ratio. Since this ratio is low, banks prefer to allocate most of their capital to revenue-generating loans. When their cash reserves fall too low, banks borrow from the ECB to cover short-term liquidity needs. On the other hand, commercial banks can also deposit excess funds with the ECB at a lower interest rate. Reasons for fluctuations
The ECB’s primary mandate is to maintain price stability. The Euro area inflation rate is, in theory, the key indicator guiding the ECB's actions. When the fixed interest rate is lower, commercial banks are more likely to borrow from the ECB, increasing the money supply and, in turn, driving inflation higher. When inflation rises, the ECB increases the fixed interest rate, which slows borrowing and helps to reduce inflation.

This statistic presents the development of share of current account holders, who use mobile banking to communicate with their bank at least once a month in the United Kingdom (UK) from 2010 to 2015. By 2015, it can be seen that 34 percent of respondents stated they used mobile banking at least once a month. The increases observed in mobile banking usage were steep over time: in 2010, only eight percent of current account holders on the British market turned monthly to mobile banking as a secure way of communicating with their bank. Compared to that share, the increase to 34 percent in 2015 marked the growth of over four times in five years. At the same time, the worries of mobile and mobile apps users with regards to security of their financial data have increased as well. Still, the positive reactions to the prospect of private data sharing by the UK banks amounted to nearly 40 percent of the sample studied in 2015; the negative reactions were measured at 30 percent.

The rise of digital disruptors, challenger banks, and sustainability-focused financial institutions has reshaped the banking landscape, drawing billions in investment. To compete with established players, these newcomers have had to balance rapid customer acquisition with long-term retention. While digital banks once displayed wide swings in retention rates - some enjoying strong loyalty while others faced steep churn - recent trends suggest that retention has begun to stabilize. In the first quarter of 2025, for example, Monzo reported a positive retention ratio, while Starling Bank experienced a modest decline. Biggest winners In the first quarter of 2025, Nationwide and Monzo emerged as the leaders in customer retention, achieving an impressive ratio of *** and**** new customers for every one lost, respectively. Danske Bank, HSBC, The Co-operative Bank, and Triodos Bank also achieved good results, with *** customers switching to their services for every departing customer. In stark contrast, AIB Group faced significant challenges, with a concerning ratio of **** customers leaving for each new customer acquired. Customer growth of digital banks Digital-only banks have achieved remarkable growth in the European financial sector, with London-based Revolut leading the charge. In November 2024, Revolut reported a significant milestone of over ** million global customers, building on its strong momentum from 2024 when monthly app downloads surpassed *** million.

House prices in the UK rose dramatically during the coronavirus pandemic, with growth slowing down in 2022 and turning negative in 2023. The year-on-year annual house price change peaked at 14 percent in July 2022. In April 2025, house prices increased by 3.5 percent. As of late 2024, the average house price was close to 290,000 British pounds. Correction in housing prices: a European phenomenon The trend of a growing residential real estate market was not exclusive to the UK during the pandemic. Likewise, many European countries experienced falling prices in 2023. When comparing residential property RHPI (price index in real terms, e.g. corrected for inflation), countries such as Germany, France, Italy, and Spain also saw prices decline. Sweden, one of the countries with the fastest growing residential markets, saw one of the largest declines in prices. How has demand for UK housing changed since the outbreak of the coronavirus? The easing of the lockdown was followed by a dramatic increase in home sales. In November 2020, the number of mortgage approvals reached an all-time high of over 107,000. One of the reasons for the housing boom were the low mortgage rates, allowing home buyers to take out a loan with an interest rate as low as 2.5 percent. That changed as the Bank of England started to raise the base lending rate, resulting in higher borrowing costs and a decline in homebuyer sentiment.

Lloyds Bank demonstrated strong customer retention in 2024, maintaining a positive acquisition ratio throughout the year, with more customers joining than departing each quarter. The bank achieved its peak performance in the last quarter of 2024 with an acquisition ratio of ****. This success marked a significant turnaround from 2022 and 2023, when the bank experienced customer losses across most quarters, reflected in consistently negative acquisition ratios.

On the 18th of June, 2018 the boards of CYBG plc and Virgin Money Holdings (UK) plc (Virgin Money) announced the agreement of terms of acquisition in a bid to close the gap on the "big five" UK banks. As a part of the deal the all of the groups retail customers would be moved to Virgin Money. As of September 2023, the combined group that makes Virgin Money UK had total assets worth approximately **** billion British pounds. Key figures In the year ending September 30, 2023, the combined group had approximately *** million customers and an average of over ***** full-time equivalent employees. The bank saw several improving key performance indicators (KPIs). Asset growth declined from **** percent to a negative **** percent, the cost to income ratio increased from ** percent to ** percent, and the earnings per share decreased notably as well. Challenger banks The term 'challenger bank' is used as a description of banks and financial services that were created after the Global Financial Crisis and have made significant impact in 'challenging' incumbent large banks, or have had a significant impact on the market. KPMG describe four main areas in which challenger banks have appeared in the market in the United Kingdom. These include full service retail banks such as CYBG/Virgin Money, Metro Bank and the Co-op, Specialist lenders such as OneSavings Bank and Aldermore, retailer banks including Tesco's and Sainsbury's and Digital Banks. As the newest and perhaps the most exciting facet of challenger banks, Digital banks are mobile app based banks that do not have a physical presence on the high street. Due to their simplicity and ease of use they have attracted significant attention from customers and investors alike.

Shell had the highest annual revenue of all companies based in the United Kingdom in 2025, at approximately 284 billion U.S. dollars. BP had the second-highest annual revenue at over 189 billion dollars, followed by HSBC Holdings, which had a revenue of around 142 billion U.S. dollars. In terms of global employee numbers, however, Compass Group had the highest number among UK-based businesses, at approximately half a million in 2024, followed by Tesco at 336,400 and HSBC at almost 211,000. Big Oil, a banking giant, and Britain's top supermarket chain The two companies listed as having the most revenue in the UK this year are also two of the biggest oil and gas companies in the world, alongside Chevron, Eni, ExxonMobil, and TotalEnergies. After a huge surge in energy prices in 2022, these companies saw their profits recede slightly in 2023, but clearly remain in strong financial positions as of 2024. HSBC Holdings, meanwhile, was the largest bank in Europe in terms of market capitalization, and was estimated to have the second-highest number of UK-based customers in 2024. The company with the fourth-highest revenue in this year, Tesco has by some distance the largest grocery-market share in Great Britain, a position it has maintained despite growing competition from discounters like Lidl and Aldi. UK economy health check In the first quarter of 2025, the UK economy grew by 0.7 percent, emerging from a brief slowdown in growth towards the end of 2024. Consumer Price inflation, has, however, started to increase, with the inflation rate reaching 3.5 percent in April, the highest rate since January 2024. Furthermore, the UK labor market is showing signs of weakness, with quite a high number of job losses since the start of the year. Alongside these generally negative signs, business confidence in the UK has been falling, with the main concern of UK firms being that of taxation, as of early 2025.

In 2007, the total number of employees of the NatWest Group almost doubled, reaching the highest of the observed time period, with 226,400 people employed. Since then, the number of people employed by the group has continuously decreased, reaching a total of 59.7 thousand employees in 2024. NatWest Group, named Royal Bank of Scotland until 2020, has one of the highest customer counts of any of the UK’s leading banks. Customers gained and lost As many as 100,000 people in the United Kingdom switch from their main current account provider every month. Although NatWest Group boasts millions of customers across the UK, it has seen a negative change of customers gained or lost since the second quarter or 2018. Bank employment in Europe The financial services sector in the UK has over one million employees. Behind Germany and France, the United Kingdom has the third highest number of employees in the banking sector in Europe.