(MENAFN- Trend News Agency) The United Kingdom's (UK) financial system is resilient to and prepared for a wide range of risks, including a worst-case disorderly Brexit, the Bank of England (BoE) said in a statement on Thursday,Trendreports citing Xinhua.
According to the BoE's regular "Financial Stability Report and Record," the UK's banking system remains strong enough to "continue to lend through the wide range of UK economic and financial shocks that could be associated with Brexit".
"The perceived likelihood of no-deal Brexit has increased since the start of the year," it said.
The report stated that foreign investment into the UK was much weaker in the first quarter of 2019 than in recent years, adding that the "increased Brexit uncertainties ... led to a decline in the sterling exchange rate and an underperformance of UK-focused equities."
"Despite continued signs of strong risk appetite from creditors and lenders," the bank said that "total UK private non-financial sector credit growth has not been rapid and debt servicing burdens remain low".
"Most risks to UK financial stability from disruption to cross-border financial services in a no-deal Brexit have been mitigated," it said.
The BoE said that the UK banking system remained resilient to global risks, even though these have increased during the first half of this year.
"Even if a protectionist-driven global slowdown were to spill over to the UK at the same time as a worst-case disorderly Brexit, ... the core UK banking system would be strong enough to absorb, rather than amplify, the resulting economic shocks," the BoE said.
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