The Bank of England warns how weak global markets will impact the UK

LONDON, March 27 (IFCOM). – The UK economy faces risks from weakness in global financial markets, as well as rising political tensions and rising interest rates, the Financial Policy Committee warned on Wednesday. England.

Interest rates, which in the United Kingdom stand at 5.25%, rose to higher levels than expected, and the geopolitical environment worsened, especially in the Middle East, according to the source.

The Committee points to the commercial property sector as a risk to financial stability in the UK, particularly in China, where this weakness has 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 banks with state participation, at the end of February amounted to 2.65 trillion pounds (3.10 trillion euros), or 97.1% of the country’s GDP.

Meanwhile, the committee said the outlook for UK 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 believes higher wages for workers have helped boost UK household finances, although around 45% of fixed-rate mortgage holders still have higher monthly payments.

In this regard, the FPC 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 February, down from 4% in January this year.

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The entity estimates that inflation will fall slightly below its 2% target in the second quarter of 2024. EFECOM

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