The UK economy demonstrates strength and resilience amid challenges like difficult credit conditions, inflation, and geopolitical issues, as highlighted in the Financial Stability Report for the second quarter.
Household borrowers remain resilient despite pressure from rising prices and high interest rates, with banks positioned to provide support even amidst unexpected economic deterioration.
While stock markets adapt to high interest rates, there's a warning about a potential 'sharp correction' that could impact the real economy by weakening companies' borrowing abilities and harming leveraged investors.
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