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The Bank of England identifies risks to UK financial stability

The Bank of England has outlined a range of risks to the economy from the EU vote, including the chance that foreign investment dries up.

The Bank's Financial Policy Committee (FPC) said that while the financial system has been resilient since the decision to quit the bloc, the referendum result had delivered a "challenging" outlook for financial stability.

It said the UK faced a period of "uncertainty and adjustment" - with risks to the health of public finances as a result.

The threats identified by the committee included high personal debt levels and the commercial real estate market.

On the latter point, the panel said: "The risks of a sharp adjustment are crystallising.

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"Prices have fallen and transactions are at their lowest level since 2009."

The warning was released following a meeting of the committee earlier this week.

It came as latest economic data added to growing evidence that the impact of the Brexit vote had been less severe than feared, despite warnings of economic mayhem before the vote.

Kristin Forbes, an external member of the Bank of England's rate-setting Monetary Policy Committee (MPC (KOSDAQ: 050540.KQ - news) ) - separate from the FPC - said in a speech that the initial effect of the referendum "has been less stormy than many expected".

She (Munich: SOQ.MU - news) said she was "not yet convinced" that a further interest rate cut, expected in November , would be needed to cushion the economy.

Meanwhile, CBI data showed the manufacturing sector grew strongly in September.

Earlier this week an OECD economic forecast on Wednesday upgraded UK GDP growth expectations for 2016, but there was a significant cut to the country's outlook for 2017 .

The FPC said the Bank of England's decision to cut interest rates and boost stimulus after the referendum had helped prevent more dire consequences from the Brexit vote in the short term.

There was further evidence on Thursday that the interest rate cut to 0.25% and extra help for banks announced in August had aided activity in the housing market following an initial shock in July.

The Council of Mortgage Lenders reported its strongest August for borrowing since 2007 - with an estimated £22.5bn-worth of home loans handed out.

The FPC said it was satisfied that the planned closure of the Help-to-Buy mortgage scheme at the end of the year would not cause lending to dry up.