The Bank of England on 27 March warned that investors may be too complacent about the challenges facing the global economy, with the result that there is an increased risk of a “sharp correction” in asset prices.

In its latest, quarterly report on the threats to financial stability, the Bank highlighted problems in commercial real estate globally, China’s property sector in particular, and rising levels of government debt as potential “vulnerabilities.” It also said investors are underestimating the possibility that economic growth will disappoint, or that interest rates will have to stay high to tame inflation.