2022 predictions: What’s on the horizon for financial services?

By all accounts, in common with 2021, broad uncertainty will remain a key theme for the UK economy in 2022.

Statistics from 2021 are an unhelpful indicator for 2022.  But all signs currently point to a slowing of the UK economy in 2022 following an undeniable 2021 bounce-back as people matched unexpected savings with spending on goods, services and holidays. One conservative estimate shows that the global economy is still expected to grow by about 4% in 2022, compared with an estimated 5.1% in 2021. Other estimates are more confident. Another example of one prediction for the UK economy is 4.7% in 2022, down from around 7% in 2021. Again, these estimates vary greatly. But the downward shift is consistent.

Impacting Factors

Inflation is an overall issue; both its high level, its anticipated trajectory and its likely impact on consumer spending.

Interest rates will also impact the economy. The Bank of England unexpectedly lifted interest rates in December after a rise in inflation to a decade high of 5.1% and signalled that more rate rises will follow in 2022 as soaring energy costs are expected to push inflation to 6% in the spring.

On another measure, the Consumer Prices Index (CPI) rose by 5.1% in the 12 months to November 2021, up from 4.2% in October.

There are also likely to be ongoing global and local supply chain issues, with global demand diverting supply away from the UK. This is a unique impact of this story of inflation and difficult to control with historic quantitative easing and low interest rates. Suppliers are now in a position of demand exceeding supply, so prices are inflated.

There are also plans in 2022 to increase National Insurance contributions. From 6 April 2022, National Insurance contributions will increase by 1.25%, with plans for this extra tax will be spent on the NHS and social care in the UK.

Following a lack of natural gas and increase in demand, around half of the UK’s energy suppliers have folded, equating to around 25 suppliers. Bills will therefore remain high throughout the early part of the year and will continue to rise if the price cap increases as expected in April. It will be reviewed again until October 2022.

Other points of interest for 2022

Relevant from a lenders perspective is the Financial Conduct Authority’s (FCA) introduction of a new Consumer Duty, a change to the standard of protection for consumers. A consultation is currently under way until 15 February 2022 and the FCA expects to confirm any final rules by the end of July 2022. This will herald the potential for more expensive financial services products for consumers as firms are forced to recoup the cost of implementing change.

It is also worth noting that for lenders specifically the courts are now open for business, which will allow lenders to step up efforts to rehabilitate and recover debt.


The economy risks becoming polarised as demand at one end surges but lower income households struggle to make ends meet. Overall, inflation needs to be brought under control. This won’t be a quick fix because of the complexity of impacting factors, listed above. We also anticipate that the shift to doing business online will continue, consumers in debt will feel more pressure and a new Consumer Duty by July this year is almost a certainty.


This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.


Read the latest articles and commentary from Shoosmiths or you can explore our full insights library.