The Bank of England's Financial Policy Committee (FPC) noted in its March Financial Stability Report (FSR) that the economic outlook for the UK had improved somewhat since its December 2023 FSR while some risks to the stability of the UK financial system had increased.
The Committee also warned about the heightened risk of a sharp correction in a broad range of asset prices, which could ultimately make it more costly and difficult for UK households and businesses to borrow.
The FPC however, assured that the UK banking system, which is well capitalized, has the capacity to support households and businesses, even if economic and financial conditions are worse than expected.