The Bank of England has issued a sobering analysis of the state of the UK's financial system in the wake of the EU referendum.
Threadneedle Street's Financial Policy Committee (FPC), which is designed to look after the health of the UK's money markets and protect the financial system from bringing down the UK, cited a string of elevated risks to the economy as a result of the shock vote.
The warnings, which range from concerns about commercial real estate, debt troubles for low-income households and political uncertainty across the world, stand in contrast to recent upbeat data on how the UK has fared over the summer.
The Bank of England's Brexit package
"The FPC judges that the current outlook for financial stability in the UK remains challenging," a statement from the committee's latest meeting stated.
"Heightened uncertainty about the near-term macroeconomic outlook and the UK's future relationship with the EU is reinforcing domestic risks."
The FPC added: "In the UK commercial real estate market, the risks of a sharp adjustment are crystallising. Prices have fallen and transactions are at their lowest level since 2009."
The FPC sits alongside the interest rate-setting monetary policy committee (MPC) as the two decision-making arms of the Bank. The MPC, for instance, decided to cut interest rates and unleash quantitative easing, while the FPC announced a relaxation of capital buffers for banks in order to support the financial system. Governor Mark Carney chairs both committees.
Threadneedle Street, and Carney in particular, was credited in the weeks after the vote with taking swift and decisive action to support the UK economy. However, as the post-Brexit sharp contraction has failed to materialise yet, its policies have been brought into question. Its quantitative easing programme suffered setbacks and corners of the financial community have continued to stress concerns about the era of ultra-loose monetary policy.
Today, the Bank also reiterated concerns about the UK's near record current account deficit, which stands at 6.9 per cent of GDP. "The risk remains of a fall in overseas investors' appetite to invest in the UK," it stated.
Looking at the broader economy, the FPC said it was "concerned that the ability of some households to service their debts would be challenged by a period of weaker employment and income growth.
"These vulnerable households could affect broader economic activity by cutting back sharply on expenditure in order to service debts."