LONDON – Donald Trump’s victory in the U.S. presidential election has increased the BoE Governor Mark Carney highlighted a big rise in U.S. market interest rates since Trump’s victory, which the Bank said could be a precursor to a destabilizing sharp move higher in global government borrowing costs from previous record lows. Yields on U.S. 10-year government bonds <US10YT=RR> – which influence borrowing costs globally – are on track for their biggest monthly rise since December 2009 following Trump’s unexpected victory on Nov. 8. “The U.S. election has reinforced existing vulnerabilities,” the central bank said in its report. “The rise in , coupled with risks of reduced global trade, has reinforced the vulnerabilities associated with those emerging market economies with high levels of debt.” Trump has said he wants to boost infrastructure spending and cut taxes. This could boost U.S. economic growth but also raises the prospect of higher U.S. government borrowing costs and inflation globally when many economies are still struggling to overcome the effects of the 2007-09 global financial crisis. For rich economies, a rapid rise in bond yields from near-zero levels could hurt bank lending and lead to market instability, the BoE said. Carney said any new protectionist U.S. trade policies could throw “sand in the gears” of the global economy, with knock-on effects for Britain. Trump has said he will scrap a planned trade deal with Asian economies to bolster U.S. job creation and suggested that he could pull the United States out of the World Trade Organisation if its rules stopped him renegotiating U.S. terms of trade. “There is this possibility that the slowdown in the growth in world trade, which we have seen over the past few years, accelerates because of discrete policy initiatives potentially from the world’s largest economy,” he told a news conference. BREXIT WORRIES Aftershocks from Trump’s election were far from the BoE’s only concern. Although Britain’s economy has performed better than the BoE had expected immediately after the Brexit referendum, the central bank said some types of commercial real estate could be overvalued, even after big price falls. Britain’s government expects to start two years of formal talks to leave the EU after March, and Carney repeated his view that a lack of clarity about its priorities could push banks to move operations out of the country prematurely. Securing a transitional agreement before the financial services industry feels the full effect of Brexit would benefit both Britain and businesses elsewhere in the EU, Carney said. “It is important to recognize that the United Kingdom is effectively the investment banker for Europe,” he said, explaining that most of the EU’s corporate finance needs were met by British-based firms. “It’s absolutely in the interest of the European Union that there is an orderly transition and that there is continual access to those services.” The BoE also saw other potential threats, including “extraordinary” credit growth in China, Britain’s large current account deficit and long-standing worries about the health of the banking system in euro zone countries such as Italy. Separately, the BoE also released its annual bank stress tests, which Royal Bank of Scotland failed, requiring it to raise extra capital. -REUTERSand less trade, the Bank of England said on Wednesday. The BoE also pointed to or a disorganized British departure from the European Union in a half-yearly assessment of risks to Britain’s financial system.