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The Bank of England has issued a warning to companies that they must “prepare” for shocks in the globally financial markets.
The Bank said that over the summer there was a “spike in volatility” and despite this the British banking system stayed strong to counter a tougher economy.
In their latest report Bank’s Financial Policy Committee (FPC) they said since their last report in June UK financial stability remained unchanged.
But the bank warned on a global scale the outlook for the economy is elevated amid the geopolitical situation.
On Tuesday the Middle East witnessed a major escalation with Iran firing almost 200 ballistic missiles on Israel plus their operations in Lebanon and Vladimir Putin’s war in Ukraine.
The FPC said there has been a “short-lived spike in volatility and falls in equity indices across global financial markets in early August.”
Weaker than expected jobs report in the US along with financial result from leading AI tech firms.
“Markets remain susceptible to a sharp correction, which could affect the cost and availability of credit to UK households and businesses, with investors sensitive to short-term developments in a challenging global risk environment,” the FPC report said.
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