UK banks face stress tests on impact of energy crisis defaults

Exclusive: Move is part of Bank of England's delayed health check of financial industry

The UK's largest banks will be tested on their ability to withstand a rise in defaults linked to sky-high energy prices, as part of the Bank of England's delayed health check of the financial industry.

The Guardian understands that Threadneedle Street has crafted a new crisis scenario that will feature a deep economic recession, punctuated by soaring energy bills that could make it harder for some borrowers - particularly businesses - to afford loan repayments.