Paul Tucker, the Bank's deputy governor, warned that borrowers could be vulnerable
The Bank of England has warned that consumers, as well as financial institutions, could be vulnerable to any rise in interest rates.
Paul Tucker, the deputy governor, has asked regulators to investigate the issue immediately.
The Bank says that "significant cohorts of UK borrowers could experience financial difficulties", if rates were to rise.
The Bank's base rate has remained at a record low of 0.5% since March 2009.
If interest rates were to rise by 1%, the Bank said that households accounting for 9% of mortgage debt would need to take some kind of action.
That could include earning more, working longer hours, or cutting essential spending.
If rates were to rise by 2%, that figure would rise to 20% of mortgage debt.
Stability threat?Mr Tucker also warned about a danger to banks. He said there had been a "progressive search for yield", as institutions hunted for better returns.
He warned that the authorities "need to be alert to whether stability could be threatened by excessive leverage or liquidity risk building up in any potentially vulnerable parts of the financial system".
The dangers had been underlined by the sharp fall in share prices over recent weeks, he added.
Mr Tucker made his remarks at the launch of the Bank of England's latest Financial Stability Report.
He went on to say that regulators including the Financial Conduct Authority (FCA) should study how vulnerable borrowers and financial institutions might be to "sharp upward movements" in long-term interest rates.
The FCA and the Prudential Regulation Authority (PRA) should report back by September this year, he said.
CyberToday's report also highlights the problems of cyber attacks on the banking system.
Paul Tucker called for greater efforts by the industry to tackle the problem.
He said HM Treasury, working alongside regulators, should improve resistance to hackers, and start a programme to test banks' resilience to cyber attacks.
Source: BBC News - Business http://www.bbc.co.uk/news/business-23061790#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
