The Bank of England set out the economic downturn scenario against which major British lenders' financial health will be tested as part of its annual bank "stress tests".

The scenario - which is closer to a worst-case situation than how the BoE expects the outlook to develop - includes the BoE's Bank Rate rising to 6% early next year and a 5% fall in British economic output, as well as a 31% slump in house prices.

The BoE will publish the results of the stress test in mid 2023, which could lead to it recommending that banks hold more capital. (Reporting by David Milliken; Editing by Kate Holton)