The most recent update focuses on the deterioration of the global risk environment and intensification of uncertainty as associated with the fragmentation of global trade in goods and financial markets.
Richard Pinch, Senior Director, Risk, at Broadstone, commented: “While the Bank of England’s Financial Stability Report highlights the significantly enhanced risks to global economies, it remains confident in the resilience of UK households, business and banking system even if financial conditions were to worsen. “Despite plunging equity markets, this update should provide reassurance, that was echoed by the Chancellor yesterday, that the UK’s financial system remains resilient.
“High levels of capitalisation and liquidity support this confidence which suggests that the majority of businesses and households should remain stable and resilient even in the face of this notable period of market turbulence. For example, the report highlighted that mortgage and consumer credit arrears remained low.
“The Bank of England did suggest that some highly leveraged corporate borrowers could come under pressure from widening credit spreads if volatility remains or intensifies. It demonstrates the importance of constant model monitoring and comprehensive risk management to minimise potential harms.
https://www.bankofengland.co.uk/financial-policy-committee-record/2025/april-2025
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