BoE stress test shows UK banks are 'resilient' to 'severe' scenarios

Includes high inflation and interest rates

The UK central bank’s annual stress test scenario states UK banks were “resilient to a severe stress scenario”, which includes higher inflation and increasing global interest rates and a “deep simultaneous recession”.

The Annual Cyclical Scenario examined the capabilities of the UK's retail banks to withstand a variety of macroeconomic pressures "more severe than the 2007-08 global financial crisis". According to the Bank of England: "UK banks would be resilient to a severe stress scenario that incorporated persistently higher advanced-economy inflation, increasing global interest rates, deep and simultaneous recessions in the UK and global economies with materially higher unemployment, and sharp falls in asset prices." Ed Balls: Truss and Kwarteng's legacy is 're-establishment' of consensus The...