Bank of England warns of sharp correction risk of 'stretched' asset prices

Concerns over private equity sector

The Bank of England has issued a stark warning about the increasing risk of a “sharp correction” across a broad range of asset prices, including private equity.

In its financial policy summary and record published today (27 March), the central bank said that as markets expect the economy to continue to recover and inflation to fall, asset prices are "stretched". The BoE said the prices of many assets, such as shares and bonds, appear to be high relative to historical norms in the context of risks to the economic outlook.  That means there is a "greater risk of a sharp fall" in asset prices, the Bank said, which could ultimately make it more costly and difficult for UK households and businesses to borrow. BoE flags challenges of evaluating ...