The financial crisis had a significant effect on U.K. household and corporate sector balance sheets. Although the process of balance sheet repair is well underway, vulnerabilities remain in both sectors, particularly in commercial real estate, unsecured household debt, and some segments of the mortgage debt market. A key concern is that any stress in these segments, which could be triggered by a rapid increase in interest rates, a sustained rise in unemployment.
Discussion and analysis
Banks internationally have built up their resilience over the past ...