The Bank of England has joined the Federal Reserve in noting risks from emerging markets such as China as a possible cause for further market volatility in the coming weeks.

Although the BoE pointed to possible risks from EM volatility, they said they had not yet seen any impact on the real economy.

In the Financial Policy Committee statement released this morning, the committee noted that China was in transition to a consumer-driven economy and they could be some teething problems during the shift and said there were a number of UK asset managers with significant holdings in Emerging Markets that could be impacted.

Later in the statement the release covered the resilience of the UK financial system and noted a rise in the average core capital ratios of UK banks, increasing their ability to weather any shocks.

The BoE also said that banks had increased overall lending by 3% in the year to Q1 2015, a positive sign for the UK economy.

In further optimism for the UK economy, the Bank of England said that it saw further house price inflation and limited risks to the overall economy if there was to be fall in house prices. In regards to the Buy-to-let market the BoE said; “Any increase in buy-to-let activity in an upswing could add further pressure to house prices.”