The Bank of England warns the world that the upcoming election could affect financial stability

Forex Platform- The Bank of England warned Thursday that policy uncertainty related to upcoming elections in France and the United States raises the risk of market volatility and other economic consequences.

The BoE's comments in the bank's semi-annual financial stability report come ahead of France's first round of general elections on Sunday and the US Presidential Election in November.

Meanwhile, the UK will go to the polls on July 4, and the Bank of England has refrained from commenting specifically on the election to avoid political bias.

The Bank of England said that "policy uncertainty related to upcoming elections around the world has increased, which may reduce the certainty of the global economic outlook and lead to financial marekt volatility."

Ahead of the UK election, the Bank of England kept interest rates at 5.25%.

"It could also increase existing sovereign debt pressures, geopolitical risks and risks associated with global fragmentation, all of which have implications for UK financial stability," the BoE added.

The Bank of England joined its peers in raising interest rates between the end of 2021 and last year to combat soaring inflation.

This has forced commercial retail lenders to raise the cost of home loans, weighing on consumer spending and exacerbating the cost of living crisis.

The Bank of England estimated on Thursday that around 3 million British households will face increased monthly mortgage payments over the next two years as they look to renew mortgage agreements.

"Many UK households, including renters, remain under pressure from rising costs of living and interest rates," the BoE said.

The Bank of England last week kept its key interest rate at a 16-year high of 5.25 per cent, despite the return of inflation to its 2 per cent target.

However, the Bank of England is expected to cut interest rates at its next interest rate meeting on August 1. The upcoming elections in the United States, the United Kingdom and France may affect financial stability, and the latest news can be kept in mind.