(MENAFN) The Bank of England (BoE) cautioned on Tuesday that the financial forecasts for Britain have worsened since the start of 2022, urging the nation’s lenders to set aside more capital to captivate surprises in the markets.
It stated, accusing the catastrophe on the war in Ukraine “The economic outlook for the UK and globally has deteriorated materially,” the BoE said in its Financial Stability Report. “Prices of essential goods such as food and energy have risen sharply in the UK and globally, and the outlook for growth has worsened.”
In line with the statement, the rising costs, worsens growth and tighter economic situations are going to make it tougher for households and businesses to refund or refinance debt.
The central Bank explained that “Given this, we expect households and businesses to become more stretched over coming months. They will also be more vulnerable to further shocks.”
It advised them to rise up their capital buffer to 2 percent, which means they are going to need an extra USD13.2 billion of cash.
BoE stated that “The outlook is subject to considerable uncertainty and there are a number of downside risks that could adversely affect UK financial stability.”
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