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Bank of England warns volatility will hit financial services due to Brexit, pandemic disruptions

Build-up of substantial capital buffers since the 2008 financial crisis means the country's banking system has capacity to support businesses and households

By

Penny Sukhraj

According to the Bank of England, the major UK banks can absorb credit losses in the order of 200bn, much more than would be implied if the economy followed a path consistent with the MPCs central forecast. The economy is able to weather the disruptions of the Covid-19 pandemic and Brexit, the Bank said.
According to the Bank of England, the major UK banks can absorb credit losses in the order of 200bn, much more than would be implied if the economy followed a path consistent with the MPCs central forecast. The economy is able to weather the disruptions of the Covid-19 pandemic and Brexit, the Bank said. Photo: Getty Images

The Bank of England said the country's lending system is resilient enough to weather the disruptions that could hit the market due to Brexit and the pandemic but volatility will still hit the financial services sector.

Some volatility could arise in the markets along with disruption for financial services, particularly those for EU-based clients, the Bank said in an 11 December report from its Financial Policy Committee.

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