The Bank of England warns that the UK faces risks of weakness in global markets
Interest rates, which in the UK are at 5.25%, have risen to higher-than-expected levels and the geopolitical environment has worsened, especially in the Middle East, according to the Financial Policy Committee.
The UK economy faces risks due to vulnerabilities in global financial marketsas well as rising political tensions and rising interest rates, the Bank of England's Financial Policy Committee (FPC) warned on Wednesday.
Interest rates, which in the UK are at 5.25%, have risen to higher-than-expected levels and the geopolitical environment has worsened, especially in the Middle East, according to the Financial Policy Committee.
The committee refers to the commercial real estate sector, Especially in China, where vulnerabilities have already been observed, as well as the high level of public debt in major economies.
In the United Kingdom, the accumulated debt of the British public sector, excluding public banks, was £2.65 billion (€3.10 billion) at the end of February, or 97.1% of the country's GDP.
Meanwhile, the committee considers that the outlook for British households has improved slightly since the end of last year, although they remain under pressure from rising costs of living and rising interest rates.
However, it argues that rising workers' wages have helped boost UK household finances, although around 45% of UK mortgage holders are still under pressure from rising costs of living and higher interest rates.
In this regard, the MPC highlights that the UK banking sector is strong enough to support households and businesses, even if economic conditions worsen significantly.
The Bank of England is keeping interest rates at high levels as a way to control inflation, which fell to 3.4% in the 12 months to last February, compared to 4% in January this year.. The bank expects inflation to fall slightly below the 2% target in the second quarter of 2024.
