BoE publishes FPC record

The BoE has published the record from the Financial Policy Committee meeting on 27 March 2026. The meeting focused on the negative supply shock to the global economy resulting from the conflict in the Middle East, noting that the financial system has been resilient so far but that the continuing shock is likely to interact with known vulnerabilities in sovereign debt markets, risky asset valuations and risky credit markets. There is concern that several vulnerabilities may crystallise simultaneously, which mean risk management is more important than ever.

Other key findings included:

• valuations are particularly stretched for US tech companies focused on AI;
• investor sentiment around risky credit markets, particularly private credit, had worsened even before the conflict started and redemption requests have been elevated resulting in some funds limiting redemptions;
• the domestic economic outlook has deteriorated. Aggregate household and corporate indebtedness is still relatively low, but there are vulnerabilities among certain SMEs and highly-leveraged companies, including private equity-backed businesses;
• that the planned Private Markets SWES is needed;
• the UK banking system remains resilient;
• the CCyB remains at 2% because the UK banking system is still appropriately capitalised and there is no evidence of restrictions in lending being needed to protect banks’ capital positions; and
• financial system participants do not seem to have adopted more advanced forms of AI in a manner that would present systemic risk. But these risks are likely to increase.