Escalating global threats make for harsher BoE stress test
World GDP assumed to contract 2.6% in 2019 scenario
UK lenders face a tougher stress test in 2019, with the most extreme assumed contraction in world GDP to date, as the Bank of England's economic forecasts darken.
Citing increased "underlying vulnerabilities" in the global economy, the BoE assumes a peak-to-trough reduction in world GDP for its stress scenario of 2.6%, up from 2.4% in the 2018 scenario and the highest since the tests started in 2014.
US GDP is assumed to fall peak-to-trough by 3.7%, China GDP 1.2% and Euro area GDP 4%
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