LONDON (Reuters) – Worries about risks to the UK financial system posed by a global economic downturn have risen sharply to their highest level since the second half of 2019, a Bank of England (BOE) survey showed on Wednesday.

The Bank's twice-yearly systemic risk survey polled 55 financial firms between July 23 and August 12 and asked each participant to list the five risks they believed would have the greatest impact on the UK financial system if they materialised.

One-third of participants flagged worries about the threat to the UK financial sector associated with an overseas/global economic downturn, an increase of 19 percentage points and the largest single increase compared with the results of the previous survey in March, the BoE said.

The BoE said overall risks to British financial stability were unchanged compared with its last assessment in June, but that it would be wrong to draw comfort from a rapid rebound in asset prices after a drop in August.

The two most frequently cited risks to UK financial stability echoed previous surveys. Some 93% of respondents cited geopolitical risk, an increase of 8 percentage points on the BoE's previous survey, while a cyber attack was cited by 80% of firms, up by 10 percentage points.

Respondents reported a range of concerns within these two categories, including ongoing conflicts, global elections, and the potential for cyber attacks to impact the whole financial system including banking system infrastructure.

The proportion of respondents citing climate risk has fallen in recent surveys, and came in at 29%, some seven percentage points lower than the previous survey and the lowest since the second half of 2022.

(Reporting By Sinead Cruise; Editing by Toby Chopra)