BoE says risk of ‘sharp correction’ in asset prices has risen

Drop in asset prices could trigger renewed “dysfunction” in core markets, central bank says

Bank of England
Bank of England
Photo: Juno Snowdon Photography

The Bank of England warns asset prices are “stretched” and the risk of a “sharp correction” has risen, which could impact the functioning of the UK government bond (gilt) market.

“Conditions remain challenging,” the BoE said today (March 27), in a summary of the latest financial policy committee (FPC) meeting. “Global and geopolitical risks are high and have continued to increase.”

Despite these risks, markets have been buoyant, as investors predict a continued economic recovery and falling

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