Sunak updates BoE remit: Positive Money response

Responding to the news that Rishi Sunak has today updated the remit of the Bank of England to support the government’s energy strategy, research and campaign group Positive Money have called for the central bank to urgently restrict UK banks’ investment in fossil fuels and redirect finance towards renewables.

In separate letters to the Bank’s Financial Policy Committee and Prudential Regulation Committee, the Chancellor recommended that both committees “should have regard to the Government’s energy security strategy and the important role that the financial system will play in supporting the UK’s energy security – including through investment in transitional hydrocarbons like gas – as part of the UK’s pathway to net zero.”

Fran Boait, executive director of Positive Money, said:

“As the public institution which oversees and underpins our financial system, the Bank of England has a key role in shifting investment towards a low carbon, energy secure future, and it’s positive that the Chancellor has emphasised this. 

“However, the suggestion that the Bank of England should facilitate investment in hydrocarbons like gas directly contradicts the Bank’s ‘green mandate’, which the Chancellor updated only a year ago. Both the International Energy Agency and the UN have been quite clear that there is no room for any oil, coal or gas expansion – domestic or imported – if we are going to meet net zero by 2050 and the 1.5C temperature limit the UK is committed to.

“In order for the UK to meet both our net zero target and ensure energy security, the Bank of England must move urgently to stop the City of London pouring billions into fossil fuels we can’t control the price of, and redirect finance towards cheap renewable energy like wind and solar.”

Notes:

• Details on Rishi Sunak’s recommendations for the FPC: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1067016/Recommendations_for_the_Financial_Policy_Committee_April_2022_final.pdf 

• Details on Rishi Sunak’s recommendations for the PRC: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1067015/Recommendations_for_the_Prudential_Regulation_Committee_April_2022_final.pdf 

• Positive Money is a research and campaign organisation working towards a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. www.positivemoney.org.uk 

• For more information please contact press@positivemoney.org.uk or call Chloe Musto on 07724980666.