Bank of England Deputy governor Dave Ramsden warned on Monday that comparatively calmer market conditions of this year could lead to greater risk-taking in the future.
The official emphasized that the BoE policymakers must continue to be vigilant, given the increasing uncertainty around the outlook.
Ramsden also stressed that the central bank's policymakers should monitor and assess risks in UK financial markets and utilize the BoE's balance sheet when appropriate. "Getting the balance right in our balance sheet operations should help us to maintain financial stability and, in doing so, lay the foundations for sustainable growth," he added.
While noting that gilt markets continue to function in an orderly manner, the official pointed out vulnerabilities such as hedge fund leverage and concentration.