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The BIS 2025 Report: What It Means for Your Salary, Savings, and the Economy

By Team SalaryCalculate · 6/29/2025

The BIS 2025 Report: What It Means for Your Salary, Savings, and the Economy

The Bank for International Settlements (BIS) has released its much-anticipated Annual Economic Report, warning that the global economy stands at a “pivotal moment.” But what does that actually mean for your salary, your savings, and your future financial stability?

This article breaks down the key findings from the BIS, how they affect the UK workforce, and what actions you might consider as inflation, interest rates, and financial risks evolve.

What Is the BIS?

The BIS is the "central bank of central banks", a powerful global financial institution based in Switzerland. It helps coordinate monetary policy and monitors systemic risk across countries, including the UK.

Its annual economic report is one of the most important forward-looking assessments of the global financial system, often influencing how central banks like the Bank of England shape future interest rates and inflation policy.

Key Warnings from the 2025 Report

1. The Global Economy Faces a “Pivotal Moment”

According to the BIS, economic resilience is under threat from:

  • Geopolitical fragmentation (e.g., UK-EU tensions, US-China tariffs)
  • Demographic headwinds (aging populations, shrinking workforces)
  • Climate-related disruptions
  • Public sector debt at record highs

These risks could slow productivity and reduce real wage growth over the next decade unless addressed.

2. Inflation Expectations May Be “Unmoored”

The BIS cautioned that central banks risk losing control over inflation expectations:

“The era of anchored inflation is over unless policymakers act with credibility and coordination.”

This matters to your take-home pay. If inflation expectations spike:

  • Wages may rise more slowly than prices, reducing your real income.
  • Interest rates may stay higher for longer, affecting mortgage repayments and debt costs.

3. The U.S. Dollar Is Weakening Rapidly

The U.S. dollar has dropped nearly 10% year-to-date, raising questions about its future reserve status. For the UK, this means:

  • Imported goods from the U.S. may become cheaper.
  • However, UK exporters could suffer if the pound strengthens too much.

This exchange rate volatility adds uncertainty for companies—and workers—in global-facing industries like tech, manufacturing, and finance.

4. Stablecoins & Financial Innovation: A Warning

The BIS issued its strongest warning yet against private digital currencies like stablecoins:

  • They “threaten monetary sovereignty”
  • May lead to “shadow financial systems” unless regulated
  • BIS advocates for central-bank-backed digital currencies (CBDCs) and “tokenized unified ledgers”

If you're in fintech or receive part of your income in crypto, watch this space. Regulatory change is coming—and fast.

5. Central Banks Need to “Rebuild Trust”

Perhaps the biggest theme is the loss of confidence in institutions:

  • Governments and central banks are urged to show fiscal discipline
  • Transparency in inflation targeting and employment support is critical

A loss of trust could trigger market shocks, policy overcorrections, and wage instability.

What This Means for Your Salary and Finances

IssueImpact on Workers
Inflation risksYour real take-home pay may shrink if wages don't keep up with living costs
Interest rate uncertaintyMortgage and debt payments could remain high; less room to save or invest
Currency volatilitySalaries in international firms may be affected by exchange rate fluctuations
Crypto/fintech regulationIf you're paid in crypto or work in fintech, watch for legal and tax changes
Government debt pressurePossible future tax increases or spending cuts impacting public sector pay

How to Protect Your Income

1. Stay Informed on Inflation and Rate Changes
Track BoE updates, especially around base rate decisions. Use our UK Net Salary Calculator to simulate different tax and NI scenarios.

2. Re-evaluate Your Pension Contributions
Higher inflation means your pension needs to grow more. Consider whether salary sacrifice or increased contributions make sense.

3. Hedge Against Currency Risk
If you work with international clients or are paid in non-GBP currencies, keep an eye on dollar and euro trends. Use our tools to convert your gross salary into take-home equivalents.

4. Watch for Crypto and Stablecoin Regulation
Changes in taxation or employer rules for crypto-based salaries may impact your net income or tax liabilities.

5. Ask for Pay Reviews Based on Real Pay Value
As inflation accelerates, employers may lag in adjusting pay. Use real-terms calculators to strengthen your negotiation position.

Try Our Tools

Final Thoughts

The BIS’s 2025 message is clear: brace for long-term uncertainty, inflation pressure, and regulatory transformation. While these are macroeconomic forces, they affect your day-to-day finances, especially your take-home pay, pension, and tax outlook.

We’ll continue monitoring the Bank of England and global reports to help you stay one step ahead.

Further Reading & Official Sources

Related Resources & Commentary