BOE says that risks to global outlook have increased
The Bank of England comments in the release of its latest financial stability report - 11 July 2019
- Perceived likelihood of no-deal Brexit has risen
- No-deal Brexit could cause material economic disruption
- But says that UK banks could withstand a disorderly Brexit
- Sees risks in high debt levels, corporate leverage
- Mismatch in open-ended funds could pose systemic risks
- Central bank will review how to address the issue of liquidity mismatch
This certainly plays into the narrative that perhaps the central bank may not be looking to stick to its limited and gradual rate hike plan, if they see rising risks towards the global economy and a no-deal Brexit materialising.
That said, we'll have to wait and see how things play out over the next few months once either Johnson or Hunt is elected as prime minister. Otherwise, there isn't much else to work with besides some theoretical commentary here.
BOE governor Mark Carney will next be delivering the press conference on the report at the top of the hour, but I wouldn't expect anything too different from the report here.