Tue, 02 Dec 2025

Tue, 02 Dec 2025 UK share values 'most stretched' since 2008, Bank warns

The bank warned US stock price valuations are their most stretched since the dotcom bubble burst.

* The Bank of England has warned of a "sharp correction" in the value of major tech companies, particularly those focused on AI.
* Share prices in the UK and US are at levels reminiscent of the dotcom bubble before it burst in 2000.
* The growth of the AI sector will be fueled by trillions of dollars of debt, raising financial stability risks if the value of these companies falls.
* Around half of the funding for AI infrastructure will come from outside sources, mostly through debt.
* A sudden and sharp correction could lead to increased financial stability risks and losses on lending.
* The warning is part of a broader trend of institutions sounding the alarm over potential crashes in the value of AI firms.
* Other risks to financial stability mentioned by the Bank of England include geopolitical tensions, global trade wars, and rising borrowing costs for governments.
* Homeowners coming off fixed rate mortgages face an average increase in their monthly repayments of £64, or 8%.
* 3.9 million people, or 43% of mortgage-holders, are expected to refinance at higher rates by 2028.
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