A man sits on a step outside the Bank of England in London on May 7, 2020. (Photo: AFP)

The Bank of England on Wednesday urged Britain's retail lenders to prepare for the potential failure of EU-UK negotiations on agreeing a post-Brexit trade deal.

"The possibility that negotiations between the UK and EU over a future trading relationship might not conclude in a deal is one of a number of outcomes that UK banks need to prepare for over the coming months," the BoE said in a statement.