Stock markets are too high and set to fall, says Bank of England deputy

Stock markets are too high and set to fall, says Bank of England deputy6 minutes agoShareSaveAdd as preferred on GoogleSimon JackBusiness editorGetty ImagesThe Bank of England expects stock markets around the world to fall as share prices do not reflect the many risks facing the global economy, its deputy governor has told the BBC.Sarah Breeden said: "There's a lot of risk out there and yet asset prices are at all-time highs. We expect there will be an adjustment at some point."It is unusual for a senior figure at the Bank to be so forthright on market movements. Breeden, who is also the Bank's head of financial stability, declined to say when she expected markets to fall or by how much, but pointed to a number of factors that markets seemed complacent about."The thing that really keeps me awake at night is the likelihood of a number of risks crystallising at the same time – a major macroeconomic shock, confidence in private credit goes, AI and other risky valuations readjust - what happens in that environment and are we prepared for it?" she said.The US stock market is home to the world's biggest companies and has set a series of all-time highs recently despite warnings from the International Energy Agency that the world economy is facing the biggest energy shock in history.Technology firms have poured hundreds of billions of dollars into AI infrastructure prompting some, including Microsoft founder Bill Gates to call it "a frenzy" that resembles the dotcom bubble of the late 1990s, when investors threw money at unproven start-ups that quickly went bust or had billions wiped off their value. Nvidia boss Jensen Huang, the biggest supplier of chips to AI companies, is among those to dismiss these concerns.A number of funds that mimic the role of banks and lend privately to businesses have sustained losses and have had to restrict withdrawals from investors, sparking concerns of weaknesses in the financial system.Breeden sa...