London Daily

Focus on the big picture.
Saturday, Feb 21, 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
UK Confirms Preferential U.S. Trading Terms Will Continue After Supreme Court Tariff Ruling
U.S. and U.K. to Hold Talks on Diego Garcia as Iran Objects to Potential Military Use
UK Officials Weigh Possible Changes to Prince Andrew’s Position in Line of Succession Amid Ongoing Scrutiny
British Police Probe Epstein’s UK Airport Links and Expand High-Profile Inquiries
The Impact of U.S. Sanctions on Cuba's Humanitarian Crisis: A Tightening Noose
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
United Kingdom Denies U.S. Access to Military Base for Potential Iran Strike
British Co-founder of ASOS falls to his death from Pattaya apartment
Early 2026 Data Suggests Tentative Recovery for UK Businesses and Households
UK Introduces Digital-First Passport Rules for Dual Citizens in Border Control Overhaul
Unable to Access Live Financial Data for January UK Surplus Report
UK Government Considers Law to Remove Prince Andrew from Royal Line of Succession
UK ‘Working Closely with US’ to Assess Impact of Supreme Court Tariff Ruling
Trump Criticises UK Decision to Restrict Use of Bases in Potential Iran Strike Scenario
UK Foreign Secretary and U.S. State Chief Hold Strategic Talks as Tensions Rise Over Joint Air Base
Two teens arrested in France for alleged terror plot.
Nordic Fracture: How Criminal Scandals and Toxic Ties are Dismantling the Norwegian Crown
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
King Charles III Opens London Fashion Week as Royal Family Faces Fresh Scrutiny
Trump’s Evolving Stance on UK Chagos Islands Deal Draws Renewed Scrutiny
House Democrat Says Former UK Ambassador Unable to Testify in Congressional Epstein Inquiry
No Record of Prince Andrew Arrest in UK as Claims Circulate Online
UK Has Not Granted US Approval to Launch Iran Strikes from RAF Bases, Government Confirms
AI Pricing Pressure Mounts as Chinese Models Undercut US Rivals and Margin Risks Grow
Global Counsel, Advisory Firm Co-Founded by Lord Mandelson, Enters Administration After Client Exodus
London High Court dispute over Ricardo Salinas’s $400mn Elektra share-backed bitcoin loan
UK Intensifies Efforts to Secure Saudi Investment in Next-Generation Fighter Jet Programme
Former Student Files Civil Claim Against UK Authorities After Rape Charges Against Peers Are Dropped
Archer Aviation Chooses Bristol for New UK Engineering Hub to Drive Electric Air Taxi Expansion
UK Sees Surge in Medical Device Testing as Government Pushes Global Competitiveness
UK Competition Watchdog Flags Concerns Over Proposed Getty Images–Shutterstock Merger
Trump Reasserts Opposition to UK Chagos Islands Proposal, Urges Stronger Strategic Alignment
Greek Prime Minister Kyriakos Mitsotakis advocates for a ban on minors using social media.
Liberal Senator Michaelia Cash Accuses Prime Minister of Lying to Australians
Meanwhile in Time Square, NYC One of the most famous landmarks
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
A Lunar New Year event in Taiwan briefly came to a halt after a temple official standing beside President Lai Ching‑te suddenly vomited, splashing Lai’s clothing
Jillian Michaels reveals Bill Gates’ $55 million investment in mRNA vaccines turned into over $1 billion.
Ex-Prince Andrew Mountbatten-Windsor's arrested
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
Four Chagos Islanders Establish Permanent Settlement on Atoll
Unitree Robotics founder Wang Xingxing showcases future robot deployment during Spring Festival Gala.
UK Inflation Slows Sharply in January, Strengthening Case for Bank of England Rate Cut
Hide the truth, fake the facts, pretend the opposite, Britain is as usual
France President Macron says Free Speech is Bull Sh!t
Viktor Orbán getting massive praise for keeping Hungary safe, rich and migrant-free!
UK Inflation Falls to Ten-Month Low, Markets Anticipate Interest Rate Cut
UK House Prices Climb 2.4% in December as Market Shows Signs of Stabilisation
BAE Systems Predicts Sustained Expansion as Defence Orders Reach Record High
×