The UK financial sector’s view of current key risks has shifted according to a new Bank of England survey, with cyber, geopolitical and inflation-related concerns topping the list.

The BoE’s 2022 H1 systemic risk survey asked market participants how confident they are in the UK financial system and what risks they think the system is facing. Cyber-attack risk and geopolitical risk remain among the top three most cited risks, and have been since the 2017 H1 survey.

However, pandemic risk is no longer a top three risk among survey participants, with most firms now citing inflation risk instead. The percentage of participants listing UK political risk as a key risk fell to its lowest level since the EU referendum with 26% of respondents flagging this.

The largest change since the 2021 H2 survey was around inflation risk, becoming one of the top five risk concerns for the first time since the survey began in 2008. It was mentioned as a key risk by 33% of respondents in 2021 H2, but this has now risen to 63%.

Climate risk is being increasingly viewed as a key risk to the UK financial system. In the recent survey, climate risk was referenced by 24% of respondents and captured concerns around physical, transitional and environmental risks. However, no respondents cited this as a ‘number one’ source of risk.

The survey ran between 24 January and 14 February, concluding before the Russian invasion of Ukraine.

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