Banks ‘could weather £125bn hit in economic downturn’ despite rising interest rates

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The UK’s largest banks are strong enough to weather a £125bn financial hit during a severe economic downturn, despite facing mounting stress from rising interest rates, the Bank of England said.

The central bank’s annual stress test of the country’s biggest lenders – which include NatWest, Barclays, HSBC, Lloyds, Standard Chartered, the UK arm of Santander, Nationwide building society and Virgin Money UK – determined that they would be able to continue lending to households and businesses even if conditions worsened.