The Bank of England (BoE) said in a report on Thursday that the risk environment remains broadly unchanged in the second quarter compared to the first. Household and corporate borrowers in the United Kingdom are still resilient, "although many remain under pressure," while banks are still in a strong position to support them, "even if economic and financial conditions were substantially worse than expected."
The BoE warned that financial markets have not yet fully adjusted to increased interest rates and market prices "remain vulnerable to a sharp correction." It also noted increased risk in the commercial real estate market in the United States, to which a number of overseas banks are exposed. Additionally, it said that important elections around the world could make the global economic outlook less certain and lead to financial market volatility, increased debt, geopolitical risks, and fragmentation.
