A senior Bank of England official has warned that global stock markets are “too high” and likely to fall, saying current share prices fail to reflect mounting risks from war, private credit, and technology valuations.
Deputy Governor Sarah Breeden told the BBC that asset prices are at record levels despite growing uncertainty. “There’s a lot of risk out there and yet asset prices are at all‑time highs. We expect there will be an adjustment at some point,” she said. Breeden declined to predict when or how severe a downturn might be, but emphasized the Bank’s role in ensuring the financial system is prepared.
Her remarks come as the FTSE 100 trades above 10,400, up 24 percent year‑on‑year, and the S&P 500 has surged 33 percent to 7,138. Both indexes dipped in March but rebounded in April, underscoring resilience despite geopolitical shocks. Heavy investment in artificial intelligence infrastructure has fueled record highs in the tech sector, prompting comparisons to the dot‑com bubble.
Breeden pointed to three main risks: the U.S.–Israeli war on Iran, the rapid growth of private credit to 2.5 trillion dollar in less than two decades, and AI‑driven valuations that could readjust suddenly.
Not all analysts share her caution. Nigel Green, chief executive of the DeVere Group, agreed valuations are high but argued the Bank is “missing the bigger picture,” saying AI and technology are reshaping valuation frameworks in real time. Nvidia chief executive Jensen Huang dismissed bubble concerns, citing sustained demand for chips powering AI adoption.
The warning underscores the possibility of simultaneous shocks across private credit, government debt, and equity markets. While resilience remains strong, Breeden’s comments highlight that current highs may not be sustainable if risks crystallize.
