Bank of England to Stress Test Private Markets Under 7% Rates and 35% Equity-Drop Scenario

The Bank of England will stress test private markets against a scenario that includes 7% interest rates and a 35% collapse in UK share prices. The exercise will apply both conditions simultaneously to measure how leveraged funds, private-equity vehicles, and other non-bank intermediaries would perform under those shocks.

@business reported the details of the test, which the central bank outlined in its latest supervisory communication.

The 7% rate level exceeds current policy settings, while the equity-price decline matches the scale of some past market corrections. The Bank of England has not released the full methodology or the date when results will be published.