The UK was a notable casualty of the financial market turmoil of 2007-09, the fallout from which inhibited economic activity before the economy entered a robust recovery phase at the beginning of 2013. Uncertainty and volatility have since receded, although an uneven global recovery and domestic factors-including excessive private-sector debt, fragile bank balance sheets, risks associated with financial markets' search for short-term yield and tighter regulation-continue to pose risks to financial sector stability. Persistent weakness in the euro zone will remain an external risk for the UK, owing to unsustainably high debt levels, uncompetitive economies, elevated social tensions and high unemployment across much of the region.
Domestic sentiment has improved in the UK since 2013, as lending conditions across financial markets improved in response to central bank intervention. This is supporting an upturn in mortgage lending in particular, but the prospects for a balanced and sustained recovery over the medium term remain subject to significant risks.

Financial services report 2

Banks 4

Insurers 7

Asset managers 9

Financial markets and instruments 11

Financial regulation 13

Monetary and currency policy 14

United Kingdom at a glance 16

Fundamental indicators 17

Key contacts 18

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