On 30 September 2026, the Bank of England (BoE) published a Record of the Financial Policy Committee (FPC) meeting on 25 September 2026.
Headline judgements and policy actions from the meeting include:
- The likelihood that interconnected vulnerabilities in the financial system crystallise has risen since the FPC previous meeting.
- The re-escalation of the conflict and the associated rises in oil, gas and refined product prices are leading to a more protracted negative supply shock to the global economy. This has contributed to sustained increases in sovereign bond yields across a number of advanced economies, to levels not seen since 2008.
- The financial system has so far been resilient in response to these increases in sovereign bond yields, and market adjustments have been mostly gradual. Although hedge fund leverage in the gilt market has been stable, it remains elevated, and deeper interconnections between vulnerabilities means the risk of a sharp adjustment persists. This underlines the importance of the BoE’s work on gilt repo market resilience.
- Equity markets in aggregate have, thus far, been resilient to increases in bond yields and the tightening in financial conditions. Equity valuations for AI companies fell sharply in July.
- Recent frontier artificial intelligence (AI) test-environment incidents, where autonomous models have taken unexpected actions, reinforce the FPC’s calls for firms to prepare for AI-related cyber and operational risks.
- Risky credit markets, including parts of private credit, remain vulnerable to a tightening in financing conditions.
- Domestically, the FPC judges that households and corporates remain resilient and the UK banking system remains appropriately capitalised with high levels of liquidity.
- The FPC has maintained the UK countercyclical capital buffer rate at its neutral setting of 2%.
- The FPC agrees to proceed with the proposed leverage ratio reforms as set out in the July Record, which the BoE expects to consult on in early 2027. This increases the importance of continuing to develop and implement measures to improve the resilience of the gilt repo market.
- Consistent with the Chancellor’s request in the 2025 Remit letter, the FPC continues to monitor and strengthen its assessment of climate-related risks to the UK financial system.
The BoE has also published the Systemic Risk Survey Results – 2026 H2. The Systemic Risk Survey is conducted on a biannual basis, to quantify and track market participants’ views of risks to, and their confidence in, the stability of the UK financial system.
Key results from the Systemic Risk Survey include:
- Survey respondents remain confident in the stability of the UK financial system, reporting a similar level of confidence compared to the 2026 H1 survey.
- The perceived probability of a high-impact event affecting the UK financial system over the short and medium term is higher compared to the previous survey.
- Geopolitical risk and cyberattack remain the two most frequently cited sources of risk among participants. They are also considered the most challenging risks to manage, as well as the most likely risks to materialise.
- The number of participants citing risks surrounding AI has increased substantially, reaching its highest level recorded in the survey across all three categories: source of risk to the UK financial system, most challenging risk to manage, and most likely risk to materialise. Combined with a sustained upward trend over recent surveys, this suggests AI-related risks are becoming a mainstream concern for market participants.
- The proportion of respondents citing UK political risk has decreased compared to the 2026 H1 survey, while the proportion citing inflation risk has increased.