Overview

The Bank of England’s financial stability objective is to protect and enhance the stability of the financial system of the United Kingdom. The Systemic Risk Survey contributes to this objective by quantifying and tracking, on a biannual basis, market participants’ views of risks to, and their confidence in, the stability of the UK financial system.^{footnote [1]}

The survey is generally completed by executives responsible for firms’ risk management or treasury functions. The results presented are based on responses to the survey and do not necessarily reflect the Bank of England’s views on risks to the UK financial system. Participants include UK banks and building societies, large foreign banks, asset managers, hedge funds, insurers, pension funds, large non-financial companies and central counterparties. Summary statistics are calculated by giving equal weight to each survey response.

Additional background information on the survey is available in the 2009 Q3 Quarterly Bulletin article Bank of England Systemic Risk Survey.

This report presents the results of the 2025 H1 survey, which was conducted between 27 January and 24 February 2025.

55 firms participated in the 2025 H1 survey, representing a 68% response rate.

Key results from 2025 H1 survey

• Survey respondents on balance remain confident in the stability of the UK financial system over the next three years, although confidence fell relative to the previous survey, back to its level in 2024 H1.
• The perceived probability of a high-impact event affecting the UK financial system in both the short and medium term has increased for the first time since 2022 H2.
• Geopolitical risk and cyberattack remain the most frequently cited risks among participants, and are still considered the most challenging to manage by a significant margin. However, the share of respondents citing cyberattack as their ‘number one’ source of risk has declined.
• There was an increase in respondents citing risks associated with a UK economic downturn compared with the 2024 H2 survey. A larger share of respondents also cited operational risks and financial market disruption/dislocation.
• Geopolitical risk continues to be considered by a majority of respondents as the most likely risk to materialise.

Confidence in the UK financial system

Respondents were asked about the level of confidence they have in the stability of the UK financial system over the next three years.

Chart 1 represents the results in one weighted measure, while the figures below and in Table A1 refer to simple percentages.

Survey participants on balance remain confident in the stability of the UK financial system, although confidence fell relative to the previous survey, back to its 2024 H1 level.

• No respondents report being completely confident (-2 percentage points relative to the 2024 H2 survey).
• 35% of respondents judge themselves as being very confident (-4 percentage points).
• 53% of respondents judge themselves as being fairly confident (-4 percentage points).
• 13% of respondents judge themselves not very confident in the stability of the UK financial system (+9 percentage points).

Probability of a high-impact event in the UK financial system

Respondents were asked for their view on the probability of a high-impact event in the UK financial system in the short and medium term.^{footnote [2]}

Charts 2 and 3 represent results in one weighted measure, while the figures below and in Table A1 refer to simple percentages.

Respondents judge that the likelihood of a high-impact event is a little higher than judged in the previous survey over the short term and medium term.

Over the short term (1–12 months):

• 24% of respondents consider the likelihood of a high-impact event to be high or very high (+7 percentage points).
• 42% of respondents consider the likelihood of a high-impact event to be medium (-4 percentage points).
• 31% of respondents consider the likelihood of a high-impact event to be low (-4 percentage points).
• 4% of respondents consider the likelihood of a high-impact event to be very low (+2 percentage points).

Over the medium term (1–3 years):

• 5% of respondents judge that the probability of a high-impact event over the medium term is very high (+5 percentage points relative to the 2024 H2 survey).
• No respondents judge that the probability of a high-impact event over the medium term is very low (-2 percentage points), and 11% judge that it is low (-2 percentage points).
• 53% of respondents judge that the probability of a high-impact event over the medium term is medium (+10 percentage points).
• 31% of respondents judge that the probability of a high-impact event over the medium term is high (-12 percentage points).

Sources of risk to the UK financial system

Respondents were asked to list the five risks they thought would have the greatest impact on the UK financial system if they were to materialise. To give an overview of the results, answers, which were provided in free-text format, have been grouped into the 26 categories shown in Table A2.^{footnote [3]} Below is a list of the risks that were most frequently cited by respondents in the 2025 H1 survey as one of their top five risks (Chart 4):

1. Geopolitical risk (cited by 87% of respondents, -5 percentage points since the 2024 H2 survey).

2. Cyberattack (73%, -7 percentage points).

3. Risks associated with a UK economic downturn (62%, +16 percentage points).

4=. Operational risk (33%, +11 percentage points).

4=. Risk of financial market disruption/dislocation (33%, +11 percentage points).

The risks most commonly cited by market participants as the ‘number one’ source of risk to the UK financial system (Chart 5) were:

1. Geopolitical risk (cited by 42% of respondents, equal to the 2024 H2 survey).

2. Cyberattack (18%, -13 percentage points).

3. Operational risk (11%, +5 percentage points).

4. Risks associated with a UK economic downturn (9%, +4 percentage points).

5=. Risks associated with an overseas/global economic downturn (4%, -2 percentages points).

5=. Risk of financial market dislocation/disruption (4%, +2 percentage points).

5=. Funding risk (4%, +4 percentage points).

Geopolitical risk and cyberattack remain the most frequently cited risks among participants. However, the share of respondents citing cyberattack as their ‘number one’ source of risk has declined.

There was an increase in respondents citing risks associated with a UK economic downturn compared with the 2024 H2 survey. A larger share of respondents also cited operational risk and financial market disruption/dislocation.

• The three most frequently cited risks – geopolitical risk, cyberattack, and risks associated with a UK economic downturn – were also those most frequently cited in the previous survey.
• The number of respondents citing risks associated with a UK economic downturn rose in the latest survey.
• There were increases in the share of respondents citing operational risks – including IT failure – and also financial market disruption/dislocation, with respondents noting the risk of a reduction in market liquidity.
• Beyond the top five risks, significant changes include declines in the number of respondents citing risks associated with an overseas/global economic downturn (to 20%, -13 percentage points since 2024 H2), and climate risk (to 15%, -15 percentage points).

Most challenging risks to manage as a firm

Respondents were asked to rank which of the five risks they identified would be the most challenging to manage, should they materialise.

The most cited risks are shown below (Chart 6):

1. Geopolitical risk (cited by 67% of respondents, -4 percentage points since the 2024 H2 survey).

2. Cyberattack (62%, -9 percentage points).

3. Risk associated with UK economic downturn (35%, +18 percentage points).

4. Operational risk (25%, +9 percentage points).

5. Risks around regulation/taxes (13%, +5 percentage points).

Geopolitical risk and cyberattack are still considered to be most challenging to manage for a majority of firms.

• Geopolitical risk and cyberattacks are still considered the most challenging to manage by respondents, although the proportion of respondents citing them fell slightly relative to the previous survey.
• There has been an increase in the number of respondents citing risks associated with a UK economic downturn since the 2024 H2 survey (to 35%, +18 percentage points).
• The proportion of participants citing risks associated with an overseas/global economic downturn decreased by 11 percentage points since the 2024 H2 survey.
• The proportion of respondents citing climate risk has continued to decrease (to 5%, -9 percentage points), and is now at its lowest level since 2019 H1.

Key risks most likely to materialise

Respondents were asked to rank which of the five risks they thought would be the most probable to materialise.^{footnote [4]}

The most cited risks are shown below (Chart 7):

1. Geopolitical risk (80% of respondents, +5 percentage points since the 2024 H2 survey).

2. Risk associated with UK economic downturn (49%, +20 percentage points).

3. Cyberattack (44%, -16 percentage points).

4. Operational risk (18%, +5 percentage points).

5. Risk of financial market disruption/dislocation (16%, +2 percentage points).

• Geopolitical risk remains the most likely risk to materialise according to respondents.
• The share of respondents citing risks associated with a UK economic downturn has increased, by 20 percentage points.
• There has been a decline in respondents citing cyberattack since the 2024 H2 survey, but it continues to be considered one of the most likely risks to materialise.

Data appendix

• Table A1

  Aggregate risks to the UK financial system ^{(a) (b) (c)}

  • Sources: Bank of England Systemic Risk Surveys and Bank calculations.
  • (a) Entries are percentages of respondents and may not sum to 100% due to rounding.
  • (b) The survey has been undertaken biannually since 2009, following a pilot survey conducted in July 2008.
  • (c) Figures are expressed as nearest whole integer, so may appear inconsistent with figures shown in the text of the survey.
  • (d) Respondents were asked what the probability of a high-impact event in the UK financial system was in their view, for both the short and medium term. Since the 2009 H2 survey, short and medium term have been specifically identified as 0–12 months and 1–3 years respectively. These terms were not explicitly defined in earlier surveys.
  • (e) Respondents were asked how the probability had changed over the past six months for the short and medium term. Since the 2009 H2 survey, short and medium term have been specifically identified as 0–12 months and 1–3 years respectively. These terms were not explicitly defined in earlier surveys.
  • (f) Respondents were asked how much confidence they had in the stability of the UK financial system as a whole over the next three years.
  • (g) Respondents were asked how their confidence had changed over the past six months. The question was asked from 2010 H1 onwards.

• Table A2

  Sources of risk to the UK financial system ^{(a) (b) (c) (d)}

  • Sources: Bank of England Systemic Risk Surveys and Bank calculations.
  • (a) Respondents were asked which five risks they believed would have the greatest impact on the UK financial system if they were to materialise, in order of potential impact (ie greatest impact first). Answers were provided in a free-text format and were subsequently coded into the above categories; only one category was selected for each answer. Risks cited in previous surveys have been regrouped into the categories used to describe the latest data.
  • (b) The survey has been undertaken biannually since 2009, following a pilot survey conducted in July 2008.
  • (c) Figures are expressed as nearest whole integer, so may appear inconsistent with figures shown in the text of the survey.
  • (d) Percentages of respondents citing each risk at least once in their top five, among those citing at least one risk.
  • (e) The definition of this risk includes risks associated with a snapback in low rates to more normal levels, as well as risks directly associated with low rates.
  • (f) Percentages of respondents citing each risk as their number one risk (ie the risk with the greatest potential impact), among those citing at least one source of risk.

• Table A3

  Risks most challenging to manage as a firm ^{(a) (b) (c)}

  • Sources: Bank of England Systemic Risk Surveys and Bank calculations.
  • (a) After respondents had listed the five risks, they believed would have the greatest impact on the UK financial system if they were to materialise, they were asked which three of these risks they would find most challenging to manage as a firm. Answers were provided in a free-text format and were subsequently coded into the above categories; only one category was selected for each answer. Risks cited in previous surveys have been regrouped into the categories used to describe the latest data. Table entries are the percentages of respondents citing each risk at least once in this second question, among those citing at least one source of risk.
  • (b) The survey has been undertaken biannually since 2009, following a pilot survey conducted in July 2008.
  • (c) Figures are expressed as nearest whole integer, so may appear inconsistent with figures shown in the text of the survey.
  • (d) The definition of this risk includes risks associated with a snapback in low rates to more normal levels, as well as risks directly associated with low rates.

• Table A4

  Risks most probable to materialise ^{(a) (b) (c)}

  • Sources: Bank of England Systemic Risk Surveys and Bank calculations.
  • (a) After respondents had listed the five risks, they believed would have the greatest impact on the UK financial system if they were to materialise, they were asked which three of these risks was most probable to materialise. This element of the survey was introduced in 2021 H2. Answers were provided in a free-text format and were subsequently coded into the above categories; only one category was selected for each answer. Risks cited in previous surveys have been regrouped into the categories used to describe the latest data. Table entries are the percentages of respondents citing each risk at least once in this second question, among those citing at least one source of risk.
  • (b) The survey has been undertaken biannually since 2009, following a pilot survey conducted in July 2008.
  • (c) Figures are expressed as nearest whole integer, so may appear inconsistent with figures shown in the text of the survey.
  • (d) The definition of this risk includes risks associated with a snapback in low rates to more normal levels, as well as risks directly associated with low rates.