What will 2026 look like for the UK’s electric vehicle market?

Vivid Brands/ShutterstockIn the UK, as in many other countries, the shift towards electric vehicles (EVs) has been rapid. Incentives, increased choice and some positive PR took the electric car sales to nearly 500,000 vehicles in 2025 – around 24% of the market. But the government’s budget in late November, which outlined new charges for EV owners, may have slammed the brakes on this momentum.

Climate change, bank liquidity and systemic risk

This paper examines the relevance of banks’ exposure to climate transition risk in the interbank lending market. Using transaction-level data on repo agreements, we first establish that banks with higher exposure to transition risk face significantly higher borrowing costs. This premium is a combination of a risk premium, compensating lenders for increased credit risk, and an inconvenience premium, reflecting the sustainability preferences of key dealer banks.

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