Bank of England FPC: Risk of Simultaneous Financial Shocks Has Risen Since July

The FPC's emphasis on correlated shocks, rather than any single risk, marks a shift in how officialdom is framing the current environment: energy-driven supply shocks and frontier AI vulnerabilities are being treated as potentially reinforcing, not separate. The sequencing matters — leverage ratio reform and gilt repo reform are not due until early 2027, so the near-term burden falls on existing buffers, even as markets have so far absorbed higher energy prices and yields. Whether that resilience persists if supply shocks prove durable, and whether the reform proposals land as a coherent package, are the open questions.