The Bank of England warned that high leverage among hedge funds in the UK gilt market, together with their exposures to AI‑related assets and corporate debt, is amplifying cross‑market spillover risk and making the market more prone to simultaneous stress. The warning arrived as the UK 10‑year gilt yield nears levels last seen during the 2008 financial crisis. The Financial Policy Committee is preparing measures to bolster gilt repo market resilience and rein in risks after a rise in market leve

The Bank of England warned that high leverage among hedge funds in the UK gilt market, together with their exposures to AI‑related assets and corporate debt, is amplifying cross‑market spillover risk and making the market more prone to simultaneous stress. The warning arrived as the UK 10‑year gilt yield nears levels last seen during the 2008 financial crisis. The Financial Policy Committee is preparing measures to bolster gilt repo market resilience and rein in risks after a rise in market leverage over the past 18 months; measures are expected to be published in early 2027.