Bank of England defends OBR’s independence against political attacks; UK banks pass stress tests – business live

Prof. David Miles, an official from the Office for Budget Responsibility (OBR), testified before MPs that Chancellor Rachel Reeves did not mislead the public regarding the challenges facing the UK ahead of the upcoming Budget. He stated that her messaging was consistent with the economic situation she encountered.

The Bank of England has raised concerns about increasing financial risks stemming from artificial intelligence (AI) and lending practices, highlighting the potential for instability in the financial system. This warning comes amid a backdrop of significant debt-fueled investments in AI infrastructure, which the central bank believes could lead to adverse market conditions.

India has been importing discounted Russian oil, which has raised concerns as these purchases indirectly support Moscow's military actions in Ukraine, leading to increased scrutiny from Western nations, particularly the U.S. and Europe.

Apollo Global Management President Jim Zelter has shared insights regarding expectations for 2026, emphasizing the current strengths in the mergers and acquisitions market and the resilience of the US economy. This outlook reflects a positive sentiment about future economic conditions.

Bitcoin halted its recent decline, and stocks showed a cautious rebound as the global flight from risky assets began to ease. The Bank of England adjusted its estimate for the Tier 1 capital requirements for UK banks to approximately 13% of risk-weighted assets, while also warning of potential risks associated with hedge fund strategies like the basis trade.

The Bank of England has issued a warning regarding the increasing risks associated with the basis trade strategy employed by hedge funds, which has seen net gilt repo borrowing reach nearly £100 billion in November, the highest since data collection began. This strategy involves borrowing cash against gilts as collateral, raising concerns about potential market volatility if these trades unwind disruptively.

Stifel Financial Corp. has announced plans to shut down its UK-based equities trading business, leading to significant staff cuts, as reported by sources familiar with the situation. This decision reflects a strategic pullback in the company's operations in the UK market.

The U.S. is expected to transition from a strategy of containment to a focus on technological rivalry with China by 2026, as reported by Jefferies. This shift indicates a significant change in the geopolitical landscape, emphasizing competition in technology and innovation between the two nations.