Global Risk Outlook Worsens in Bank of England Minutes
In the Bank of England's September meeting minutes, it was emphasized that global economic risks have increased due to wars and rises in energy prices.
The minutes of the Bank of England's Financial Policy Committee's September meeting announced that the risk outlook in the global economy has worsened compared to July.
Global Uncertainties
The September meeting minutes of the Bank of England's Financial Policy Committee drew attention to the renewed increase in uncertainty regarding the trajectory of growth and interest rates in some developed economies due to the US/Israel-Iran War.
Energy Prices and Supply Shocks
It was stated that the increases in the prices of oil, natural gas, and refined petroleum products have caused the negative supply shock on the global economy to persist for a longer period.
It was noted that this situation increases the likelihood that vulnerabilities in government bond and risky credit markets, as well as disruptions in asset markets, will emerge simultaneously.
Artificial Intelligence and Capital Markets
The minutes also conveyed that the rapid increase in artificial intelligence-related debt issuances has expanded the capital markets' exposure to developments in this area.
The expression was used that recent incidents in testing environments involving pioneering artificial intelligence systems where autonomous models took unexpected actions reinforce the FPC's calls for companies to be prepared for cyber security and operational risks stemming from artificial intelligence.
General Risk Assessment
Stating that due to these developments, the probability of interconnected risks materializing simultaneously has increased, the minutes warned that the risk outlook has worsened since the last FPC meeting in July.