The Prudential Regulation Authority has proposed a rules-based framework to index 128 fixed nominal thresholds across its Rulebook and guidance, replacing its largely ad hoc approach to threshold updates. The measure, foreshadowed in the PRA’s 2026/27 business plan, is intended to prevent requirements from tightening unintentionally as prices and the economy grow, while preserving the treatment of firms whose size or risk increases relative to the wider economy. In-scope thresholds would be adjusted using UK nominal gross domestic product growth and a common 2026 base year. Following an initial three-year indexation period, the first changes would take effect on July 1, 2031, with further updates every five years and six months’ advance notice. Updated values would be rounded to two significant figures and would not fall if nominal GDP declined. The framework would cover thresholds governing regulatory scope, reporting, governance, prudential methodologies and lending, funding or investment flexibility, although fewer than 10% could become more restrictive when increased. The PRA is separately seeking evidence on thresholds where indexation could create greater complexity or cost, including those affecting internal ratings based credit models, linked credit and liquidity rules, and requirements shared with or related to the Financial Conduct Authority. These thresholds are not currently proposed for inclusion and could be subject to later consultation.

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