The forecasted risk premium on lending in the UK, defined as the lending rate minus the risk-free bond rate, is expected to be stable at 0.12 from 2024 to 2026. A slight decrease to 0.11 is anticipated in 2027 and remains the same for 2028. As of 2023, the premium was at 0.13, indicating a slight predicted decline over time. This suggests stability with a minor decrease projected over the five-year period, reflecting potential adjustments in risk perceptions and lending conditions.
Future trends to watch for include potential influences of economic policy shifts, changes in the credit market, and the overall economic climate which may affect lending risks, potentially causing shifts in the risk premium.
