Bank of England warns Iran conflict heightens financial risks

Wednesday 01 April 2026 - 11:00

The Bank of England (BoE) warned on Wednesday that the ongoing conflict in Iran has created “a significant negative supply shock” to the global economy, intensifying threats to financial stability.

According to the BoE, slower growth, rising inflation, and increased borrowing costs may lead to simultaneous risks in government bond markets, private credit, and the valuations of major U.S. technology companies.

“The conflict has made the global economic environment far more unpredictable, following a period of already elevated risks,” said the BoE’s Financial Policy Committee in its quarterly report. “This raises the likelihood of large, frequent, and potentially overlapping shocks, accompanied by periods of high volatility.”

While market analysts expect the conflict to be short-lived, the BoE highlighted ongoing uncertainty regarding its path and long-term economic consequences.