[1/2]People walk past road works in front of the Bank of England in London, Britain March 23, 2023. REUTERS/Kevin Coombs
LONDON, July 12 (Reuters) – The Bank of England said on Wednesday the UK economy was proving resilient to the risks of higher interest rates, although it would take time for the full effects to be felt.
“The proportion of households with high debt service ratios… has increased and is expected to continue to do so into 2023. However, it is expected to remain well below the historic peak of 2007,” the BoE said in its semi-annual report. annual financial stability report.
The BoE said that households were more affected by higher interest rates than banks, while the corporate sector remained “broadly resilient”.
“Nevertheless, higher funding costs are likely to put some smaller or heavily indebted companies under pressure,” it said.
The BoE added that it worked with the UK Treasury following the collapse of Silicon Valley Bank to ensure there were options for the smooth resolution of small banks, exempt from some requirements for larger banks.
BoE Governor Andrew Bailey will present the report’s findings in a press conference at 0800 GMT.
Reporting by David Milliken and Huw Jones; Edited by Kate Holton
Our standards: The Thomson Reuters Trust Principles.
Comments are closed.