Bank of England Warns of Global Stock Market Correction Risk, Valuations Deemed Too High

Deputy Governor of the Bank of England Sarah Breeden has warned of the potential for a global stock market correction amid high asset valuations. Current asset prices are deemed not to reflect the various increasing global economic pressures. “There are many risks out there, but asset prices are at all-time highs. We expect an adjustment at some point,” Breeden said, as reported by the BBC on Friday (24/4/2026). Breeden did not specify the timing or scale of the correction. She highlighted the possibility of several risks emerging simultaneously and amplifying the impact on the financial system. “What really keeps me awake at night is the possibility of several risks happening together – a major macroeconomic shock, declining confidence in private credit, AI and other risky valuations adjusting – what happens in that environment and are we prepared for it?” she stated. The impact of a market correction could be widespread. Household portfolio values could decline, leading to weakened consumption. Companies could also face difficulties in securing funding and delaying investments. Business confidence would be pressured, affecting recruitment. This situation occurs as the US stock market continues to hit records. The rise is happening amid warnings from the International Energy Agency (IEA) regarding potential global energy shocks. The artificial intelligence (AI) sector is one of the main drivers. Technology companies are pouring hundreds of billions of US dollars into AI infrastructure development. Nevertheless, a differing view comes from industry players. Nvidia CEO Jensen Huang has dismissed these concerns.