Britain’s all main banks have passed the Bank of England’s (BoE) doomsday economic scenario stress test except the troubled Co-operative Bank.

State-backed lenders RBS and Lloyds barely managed to scrape through the sector-wide test.

BoE said that both "remain susceptible to a severe economic downturn", they were already taking action to strengthen their businesses.

RBS and Lloyds are now required seek permission from the BoE’s regulatory arm before paying any dividends. Co-op Bank has been mandated to slash balance sheet by offloading assets.

The other banks and building societies which took part in the test were Barclays Bank, HSBC Bank, Lloyds Banking Group, Nationwide Building Society, Santander UK and Standard Chartered.

Commenting on the results, BoE governor Mark Carney said, "The results show that the core of the banking system is significantly more resilient (and) that it has the strength to continue to serve the real economy even in a severe stress."

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The BoE’s tests explored a number of economic scenarios to test the ability of eight lenders to survive another severe financial crisis.

The scenarios tested were: UK GDP shrinking by 3.5% next year; interest rates rising to 4%; the unemployment rate climbing to 12%; house prices crashing by 35%; annual inflation growing to 6.5%; and sterling’s value falling by 30%.