UK banks must set aside enough cash to weather a crash-out Brexit, the UK’s top banking regulator warned on Thursday night.

Sam Woods, the Bank of England’s deputy governor for prudential regulation, and chief executive of the Prudential Regulation Authority, told an audience of City executives at an annual Mansion House dinner that “just in case things go badly” the PRA has “been working with firms to ensure they have in place liquidity sufficient to accommodate a severe dislocation in financial markets”.