Bank of England survey flags higher perceived financial shock risk in UK

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BoE survey highlights UK risk

Highlights

Bank of England's 2026 H2 Systemic Risk Survey shows 95% of 57 respondents remain confident in UK financial system stability over three years.
Perceptions of high-impact event likelihood increased, with 28% viewing near-term risks as high and 47% as medium, up from the previous survey.
Geopolitical risk, cyberattack, and artificial intelligence cited as leading, increasingly difficult, and likely threats, while UK political risk concern falls and inflation risk rises.

Survey findings and risk trends

As reported by the Bank of England, the 2026 H2 Systemic Risk Survey was conducted between 27 July and 24 August 2026 and drew responses from 57 firms, representing a 66% response rate. The twice-yearly survey tracks how market participants assess risks to the UK financial system and how confident they are in its resilience.

Respondents continue to report a similar level of confidence to the 2026 H1 survey. Overall, 95% say they are either very confident or fairly confident in the stability of the UK financial system over the next three years, including 39% who are very confident, unchanged from the previous round, and 56% who are fairly confident, up 2 percentage points.

The survey also shows that perceived near-term and medium-term risks have increased from the previous edition. Over the short term, defined as 0 to 12 months, 28% of respondents view the likelihood of a high-impact event affecting the UK financial system as high, while 47% rate that likelihood as medium.

Implications for UK financial institutions

Geopolitical risk and cyberattack remain the two most frequently cited sources of risk among participants. They are also seen as the most difficult risks to manage and the most likely to materialise, underscoring persistent pressure points for banks, insurers, asset managers and other institutions covered by the survey.

The number of respondents pointing to risks surrounding artificial intelligence increases substantially and reaches the highest level recorded in the survey across three categories, source of risk to the UK financial system, most challenging risk to manage, and most likely risk to materialise. By contrast, the proportion citing UK political risk declines from 2026 H1, while the share citing inflation risk rises.

The results point to a more complicated risk environment for the UK's financial sector, with firms maintaining strong overall confidence even as they identify a broader set of threats. Survey responses come from UK banks and building societies, large foreign banks, asset managers, hedge funds, insurers, pension funds, large non-financial companies and central counterparties, with each response given equal weight in the summary statistics.

Our earlier article on the surge in AI safety roles highlighted how demand is rising for specialists focused on risk controls, governance, and the safe deployment of AI systems, even as broader hiring slows. It also underscored that growing use of AI heightens concerns around security and operational risk, reinforcing the need for stronger oversight and accountability frameworks.

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