Bank of England warns UK at risk of credit crunch amid market vulnerabilities

The Bank of England warns a potential credit crunch threatens the UK due to global market vulnerabilities, rising borrowing costs, and geopolitical tensions.

Policymakers indicated a credit crunch could impede borrowing as global risks such as economic growth concerns and geopolitical conflicts weigh heavily on markets.

While interest rates are falling, suggesting relief for some mortgage holders, the Bank cautioned that stretched market valuations could lead to reduced credit availability.

The Financial Policy Committee expressed concerns over rising hedge fund bets against US Treasuries, indicating a severe risk of market stress due to unwinding those positions.

Read at Business Matters