Rachel Reeves, Chancellor of the Exchequer, will push for climate change to take center stage at the Bank of England, urging Governor Andrew Bailey to give equal weight to environmental concerns as economic growth. This change marks a significant policy shift from former Chancellor Jeremy Hunt's decision in 2023 to reduce the emphasis on climate issues within the Bank's Financial Policy Committee, aligning the institution's goals with Labour's vision of establishing Britain as a "clean energy superpower."
Critics of Reeves's move question the Bank of England's focus on climate-related risks amidst current inflationary pressures, with concerns raised about potential distractions from the Bank's primary mandate of ensuring price stability. Notably, past Bank of England governor Lord Mervyn King has emphasized the Bank's core responsibility of managing interest rates and inflation, suggesting that climate change initiatives could divert attention from crucial monetary policy objectives. Andrew Bailey has acknowledged the significance of addressing climate risks but has cautioned that such actions may fall outside the Bank's central remit.