London Daily

Focus on the big picture.
Thursday, Jul 24, 2025

UK banks 'could withstand a worst case no-deal Brexit', says Bank of England

UK banks 'could withstand a worst case no-deal Brexit', says Bank of England

UK banks are prepared for a financial crisis even in the case of a no-deal Brexit, the Bank of England said.
The banks could keep lending even if UK GDP dropped by 4.7% and unemployment jumped to 9.2%.

New figures come from an annual stress test designed to see what our banks could deal with.

The banking sector is ‘resilient to and prepared for the wide range of UK economic and financial shocks that could be associated with a worst-case disorderly Brexit,’ the Bank of England concluded today.

However, some banks might have to cut spending to stay afloat, they said.

All the UK’s main lenders could withstand a perfect storm where world gross domestic product (GDP) fell by 2.6%, UK GDP dropped by 4.7%, Bank rates rose to 4%, and unemployment jumped to 9.2%. The scenario also includes costs for bank misconduct.

The banks would also withstand financial problems caused by Brexit, the trade war between the US and China, and unrest in Hong Kong, the Bank said, as none will create a situation worse than the scenario that the Bank of England simulated.

However, UK banks would take a bigger hit from their corporate lending than in the last test, as they are giving out riskier loans to companies.

Banks have granted around 8% of their business loans, or £67 billion, to companies with a high debt-to-cash ratio. This means they owe more for each pound they hold in cash than other firms. These riskier loans would account for 15% of banks’ losses in the scenario.

The Bank said: ‘Losses on corporate exposures are higher than in previous tests, reflecting some deterioration in asset quality and a more severe global scenario.

‘Despite this, and weakness in banks’ underlying profitability … all seven participating banks and building societies remain above their hurdle rates.’

Some banks relied on cutting staff bonuses, dividends and other distributed earnings to pass the stress test.
Newsletter

Related Articles

0:00
0:00
Close
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
×