Britain's upstart financial firms are ill-prepared for aneconomic downturn or a messy Brexit, according to the Bank ofEngland (BOE).

A review of 20 fast-growing businesses by the central bank'sPrudential Regulation Authority (PRA) found that the companies,which believe they can continue growing even in declining markets,could struggle to raise funds when the credit cycle turns,according to a BOE letter summarizing theexam.

Melanie Beaman, director in the PRA's supervision unit for U.K.deposit-taking firms, said that while the industry is resilient,many firms—which weren't identified in the public release—need tostrengthen their ability to assess threats.

Many “have only existed during relatively benign creditconditions and have not experienced a downturn,” Beaman said. “Wedo not consider it appropriate to assume that significant growthwould be available in generally falling markets.”

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