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Thu, 23 Apr 2026

Thu, 23 Apr 2026 Stock markets are too high and set to fall, says Bank of England deputy

It is unusual for a senior figure at the Bank to be so forthright on market movements.
The Bank of England expects global stock markets to fall due to numerous risks facing the economy, despite reaching all-time highs. According to Deputy Governor Sarah Breeden, asset prices are not reflecting these risks and an adjustment is likely to occur at some point. Breeden pointed out several factors contributing to market complacency, including a major macroeconomic shock, loss of confidence in private credit, and adjustments in AI valuations. She expressed concerns about the likelihood of multiple risks occurring simultaneously and the preparedness of the financial system for such an event. The US stock market has recently set records despite warnings from the International Energy Agency about the world's largest energy shock in history. The rapid growth of private credit, which has reached $2.5 trillion over 15-20 years, has not been tested at this scale and complexity. Breeden emphasized that a private credit crunch is more likely than a traditional banking-driven credit crunch. While the UK stock market has also reached high levels, Breeden's primary concern is ensuring that the financial system is resilient in case of an adjustment in asset prices. She noted that predicting when and how much markets will fall is not her job but rather preparing for potential risks and their impact on the economy.