Sarah Breeden, the Deputy Governor for Financial Stability at the Bank of England, issued a formal warning on April 24, 2026, stating that global equity markets are overdue for a downward adjustment. Speaking in an interview with the BBC, Breeden argued that current asset prices, which have reached record levels in several major global economies, do not accurately reflect the underlying risks within the international financial system. She characterized the current state of the market as a disconnect between valuations and macroeconomic reality.
Breeden specifically identified two primary areas of concern: the rapid expansion of private credit markets and the elevated valuations of technology stocks linked to artificial intelligence. She noted that while asset prices remain at all-time highs, there is a significant amount of risk that has not been factored into these prices. There is a lot of risk out there and yet asset prices are at all-time highs, Breeden stated. She added that the Bank of England expects there will be an adjustment at some point to bring these figures back in line with economic fundamentals.
The warning comes amid a period of heightened geopolitical instability, specifically the ongoing conflict involving Iran. This war has triggered a significant energy shock that continues to impact global supply chains and exert upward pressure on inflation. Despite these pressures, the United States stock market reached a record high earlier this week. Similarly, Japan’s Nikkei 225 index closed at a record high on April 24, 2026, driven largely by a rally in the semiconductor sector following stronger-than-expected earnings results from Intel Corporation released on Thursday night.
The Bank of England’s focus on private credit reflects broader institutional anxiety regarding non-bank financial intermediation. Private credit involves loans funded by private investors rather than traditional banking institutions, often involving higher-risk borrowers. Breeden’s comments align with growing concerns among global regulators regarding the transparency and resilience of these markets. In the United Kingdom, the FTSE 100 share index remains approximately 5% below the record high it reached in late February, a peak established just before the start of the Iran war.
As the official responsible for financial stability, Breeden’s remarks suggest that the Bank of England is closely monitoring the potential for a sharp correction that could threaten systemic stability. The central bank has been evaluating how these risky valuations might impact the broader economy if a sudden repricing occurs. This warning follows a series of assessments by the Bank’s Financial Policy Committee regarding the sustainability of current market trends in an environment of persistent inflationary headwinds and elevated interest rates.