London Daily

Focus on the big picture.
Thursday, Apr 23, 2026

UK central bank: financial sector ready for no-deal Brexit

UK central bank: financial sector ready for no-deal Brexit

The U.K. financial system is prepared to cope with a no-deal Brexit, though uncertainties about the country's withdrawal from the European Union are weighing hard on the wider economy, the Bank of England said Wednesday.

The bank's Financial Policy Committee, which assesses financial risks, said legislation, temporary permissions and other preparations by British authorities have been made to "ensure that households and businesses will be able to use existing and new services from EU financial institutions." The wider economy, however, is feeling the strain.

"Entrenched Brexit uncertainties, particularly in an environment of weaker global growth, continue to weigh on economic activity in the U.K.," it said. "Brexit uncertainty is weighing on business investment, the prices of U.K. assets and flows of foreign capital into the U.K."

It highlighted commercial property as one sector that's struggling as global investors become more cautious.

Britain is due to leave the EU on Oct. 31 and Prime Minister Boris Johnson has insisted the country will do so with or without a withdrawal agreement. With little sign of progress in the Brexit negotiations, there are fears that the country could end up leaving in a disorderly manner — a scenario that most economists think will cause damage to the British economy as tariffs and other impediments to trade with the EU are put up.

"Although actions by businesses and authorities have resulted in some improvement in the preparedness of the U.K. economy for a no-deal Brexit, material risks of economic disruption remain," the committee said.

Johnson has consistently said that Britain will leave on the scheduled Brexit date even though Parliament has backed a bill that compels him to seek an extension to the deadline if no deal is reached at next week's EU leaders' summit in Brussels.

Whatever happens at the end of the month, the bank's Financial Policy Committee said the "core of the U.K. financial system including banks, broker dealers and insurance companies is resilient to and prepared for the wide range of risks it could face, including a worst-case disorderly Brexit."

It said that even in the event of a deep recession that sees firms unable to repay loans or households falling behind on their mortgages, Britain's major banks have the capacity to absorb ensuing losses "and still have significantly more capital than in 2007."

As a result, the committee said it was maintaining its so-called countercyclical capital buffer rate -a kind of rainy day fund -at 1%.

It noted that financial stability is not the same as market stability and that significant volatility in some markets is to be expected in a disorderly Brexit. Demand for U.K. assets, including the pound, could be expected to "fall sharply."

The committee also warned Facebook that the cryptocurrency it plans to set up, Libra, will have to clear a series of hurdles if it's to be licensed in Britain.

Though it said Libra has "the potential to become a systemically important payment system," it stressed that "such a system would need to meet the highest standards of resilience and be subject to appropriate supervisory oversight, consistent with the principles set out above."

Newsletter

Related Articles

0:00
0:00
Close
CATL Unveils Revolutionary EV Battery Tech: 1000 km Range and 7-Minute Charging Ahead of Beijing Auto Show
Crypto Scammers Capitalize on Maritime Chaos Near the Strait of Hormuz: A Rising Threat to Shipping Companies
Changi Airport: How Singapore Engineered the World’s Most Efficient Travel Experience
Power Dynamics: Apple’s Leadership Shakeup, Geopolitical Risks in the Strait of Hormuz, and Europe's Energy Strategy Amidst Global Challenges
Apple's Leadership Transition: Can New CEO John Ternus Navigate AI Challenges and Geopolitical Pressures?
Italy’s €100K Tax Gambit: Europe’s Soft Power Tax Haven
News Roundup
Microsoft lost 2.5 millions users (French government) to Linux
Privacy Problems in Microsoft Windows OS
News roundup
Péter András Magyar and the Strategic Reset of Hungary
Hungary After the Landslide — A Strategic Reset in Europe
Meghan Markle Plans Exclusive Women-Focused Retreat During Australia Visit
Starmer and Trump Hold Strategic Talks on Securing Strait of Hormuz Amid Rising Tensions
Unofficial Australia Visit by Prince Harry and Meghan Expected to Stir Tensions with Royal Circles
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
UK Stocks Rise on Ceasefire Momentum and Renewed Focus on Diplomacy
UK to Hold Further Strategic Talks on Strait of Hormuz Security
Starmer Voices Frustration as Global Tensions Drive Up UK Energy Costs
UK Students Voice Concern Over Proposal for Automatic Military Draft Registration
Rising Volatility Drives Uncertainty in UK Fuel and Petrol Prices
UK Moves to Deploy ‘Skyhammer’ Anti-Drone System to Strengthen Airspace Defense
New Analysis Explores UK Budget Mechanics in ‘Behind the Blue’ Feature
Man Arrested After Four Die in Channel Crossing Tragedy
UK Tightens Immigration Framework with New Sponsor Rules and Fee Increases
UK Foreign Secretary Highlights Impact of Intensified Strikes in Lebanon
UK Urges Inclusion of Lebanon in US-Iran Ceasefire Framework
UK Stocks Ease as Ceasefire Doubts in Middle East Weigh on Investor Confidence
UK Reassesses Cloud Strategy Amid Criticism Over Limited Support Measures
UK Calls for Full and Toll-Free Access Through Strait of Hormuz Amid Rising Tensions
Starmer Signals Strategic Shift for Britain Amid Escalating Iran-Linked Tensions
UK Issues Firm Warning to Russia Over Covert Underwater Military Activity
OpenAI Halts Stargate UK Project, Casting Uncertainty Over Britain’s AI Expansion Plans
Starmer Voices Frustration Over Global Pressures Driving UK Energy Costs Higher
UK Deploys Military Assets to Protect Undersea Cables From Suspected Russian Threat
Canada Aligns With US, UK and Australia as Europe Prepares Major Digital Border Overhaul
Meghan Markle’s Planned Australia Appearance Sparks Fresh Speculation
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
UK to Partner with Shipping Industry to Rebuild Confidence in Strait of Hormuz, Cooper Says
UK Interest Rate Expectations Ease Following US–Iran Ceasefire Agreement
Starmer Signals Major Effort Needed to Fully Reopen Strait of Hormuz During Gulf Visit
UK Fuel Prices Face Ongoing Volatility Amid Global Pressures and Domestic Factors
Kanye West’s Planned Italy Festival Appearance Draws Debate After UK Entry Ban
Smuggling Routes Shift Toward Belgium as Migrant Crossings to UK Evolve
Ceasefire Offers Potential Relief for UK Fuel and Food Prices Amid Ongoing Uncertainty
Iran Conflict Raises Questions Over UK’s Global Influence and Military Preparedness
Senator McConnell Visits Kentucky to Highlight Federal Investment in Local Projects
Kanye West Barred from Entering UK as Legal Grounds Come into Focus
UK Denies Visa to Kanye West After Sponsors Withdraw from Wireless Festival
Trump-Era Forest Service Restructuring Leads to Closure of UK Lab Focused on Kentucky Woodland Health
×