BoE paper assesses flooding impact on UK firms
Bank of England published a staff working paper on the impact of flooding on UK firms.
The paper studies how flooding affects UK firm performance, informing climate-related financial risk analysis. It supports refinement of physical risk modelling, stress testing assumptions, and credit risk overlays for flood-exposed sectors and geographies.
Supports physical climate risk quantification expected under PRA SS3/19 and climate stress testing.
Action Required
Incorporate findings into physical climate risk assessments for UK corporate exposures.
Reinforces supervisory focus on physical climate risk and UK firm-level exposures.
Update physical risk scenarios and credit overlays using BoE evidence on flood impacts; review concentration in flood-prone regions and sectors.
“Bank of England staff working paper exploring the impact of flooding on UK firms, published as research in progress to encourage comments and debate.”
Published: 2026-06-05