Britain could be heading for fresh financial turbulence, the Bank of England has warned, raising alarm over growing risks to the economy. Policymakers cautioned that markets are increasingly fragile and vulnerable to shocks that could drive up Government borrowing costs.

The Bank of England has warned that Britain remains vulnerable to a borrowing shock, piling more pressure on Rachel Reeves as she struggles to balance the books.

The growing role of hedge funds in the UK bond market is raising the risk of destabilizing selloffs, the Bank of England said Wednesday, with officials warning the opaque nature of their trading activity exacerbates the threat.

Around 3.6 million households – just over 40% of mortgage holders – are likely to see their monthly payments rise over the next three years, according to the latest update from the Bank of England.

Bank of England (BoE) governor Andrew Bailey has openly opposed the UK government’s proposed “back‑stop” power to mandate pension scheme investments into UK assets, warning that while reforms are needed, they should come through market mechanisms, not ministerial decree.