The Bank of England (BoE) published its latest bank stress test results alongside the Financial Stability Report (FSR), noting that UK financial system has stood up well, dampening rather than amplifying volatility in financial markets. The Financial Policy Committee (FPC) said it was happy with overall capital buffers at banks and concluded that overall the financial system had proved resilient.

BoE said that the outlook for UK financial stability after the Brexit vote "remains challenging" and a lot would depend on an orderly exit from the European Union. The report noted that it will take time to clarify the United Kingdom's new relationships with the European Union. Governor Mark Carney warned that Britain is “Europe’s investment banker”, so an ‘abrupt’ Brexit transition would also be bad for European firms.

The report said that the greatest risks to UK financial stability are slowing growth in China and the eurozone. The bank also commented that the US election has reinforced existing vulnerabilities, primarily due to sharp upward pressure on global yields.

BoE noted that activity in the commercial real-estate market had slowed further with a 2.6 percent decline in Q3 and highlighted the risk of a further adjustment. BoE cautioned about the decline in investor appetite for UK assets. It said that the level of UK indebtedness remains high and the ability of some households to service their debts could be challenged by a period of high unemployment.