Bank of England warns Brexit could strain its resources

The Bank of England (BoE) has warned that Brexit is a “material risk” to the task of regulating the City, adding its ability to regulate the financial sector could be more complicated once Britain leaves the European Union.

In a letter to Nicky Morgan, the Conservative MP and new head of the Treasury select committee, BoE deputy governor Sam Woods said the objectives of the Prudential Regulation Authority (PRA), would face a serious threat as the Bank deals with the process of taking the UK out of the 28-country bloc.

The PRA, the BoE’s regulatory arm, whose targets include promoting financial stability, faced a “material extra burden” if it had to regulate a bigger number of firms as they worked on a strategy to cope with the Brexit impact.