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BOE Looks Beyond Rate Guidance in U.K. Bank Stress Test

The Bank of England is willing to put aside its own forward guidance to determine how well the country’s eight largest lenders would fare in a crisis.

Governor Mark Carney has said rate increases from the current record-low 0.5 percent are likely to be gradual and the peak in rates lower than in previous cycles. Yet in its stress test of the U.K.’s eight largest banks, the BOE assumes an increase to 4 percent by the end of 2015.