Bank of England is holding back government’s clean energy and growth missions, MPs warned

London, 25 September, 2025 - MPs have been urged to push the Bank of England to step up its climate and nature work, with 11 leading economic and environmental campaign groups warning that the Bank is currently hindering the government’s clean energy and green growth missions.

In a joint briefing to parliamentarians, WWF, Green Alliance, Greenpeace, Positive Money, E3G, the New Economics Foundation, Reclaim Finance, The Finance Innovation Lab, ShareAction, Global Canopy and Leave it in the Ground Initiative (LINGO) pressed MPs to put pressure on the Bank of England to coordinate with the government to support the clean energy transition. 

The briefing comes days ahead of the 10 year anniversary of a landmark speech from former Bank of England governor and current Prime Minister of Canada, Mark Carney, in which he warned of the threats posed by climate change to the economy and financial system. 

A decade later, the think tanks argue that the Bank is now actively undermining climate and nature action by accepting assets such as holdings in fossil fuel companies as collateral against the loans they provide to financial firms. In doing this, the Bank is providing an implicit subsidy to high emitting companies, according to the signatories, and it should follow the European Central Bank in introducing climate considerations to these rules.

By misguidedly raising interest rates to respond to inflation driven by fossil fuel price spikes and supply chain bottlenecks, the organisations say that the Bank has also made it more expensive for the government and private sector to make the green investments needed to address the underlying drivers of inflation. 

The briefing says that the impacts of climate change and nature loss are causing increasing inflationary pressures, such as through reduced agricultural yields. They say that preparing for future inflation, including using tools beyond interest rates, is a ‘political imperative’ to prevent a repeat of the cost of living crisis. 

Notes:

• The full briefing can be found here: https://www.datocms-assets.com/132494/1758617456-the-bank-of-england-is-holding-back-the-government-s-economic-missions-docx-2.pdf 

• Labour committed in its manifesto to reversing the previous government’s decision to direct the Bank to reduce its focus on climate work: https://labour.org.uk/change/make-britain-a-clean-energy-superpower/ 

• In June 2025, former Bank of England staff told the Financial Times that Senior Managers have not been empowered to take climate risks seriously since Andrew Bailey took over as Governor in 2020: https://www.ft.com/content/c9919c02-8328-4fa0-af4d-a108770a9f73 

• The Bank of England’s August Monetary Policy Report noted that extreme weather and climate change is contributing to the UK’s high food prices: https://www.bankofengland.co.uk/monetary-policy-report/2025/august-2025

• The European Central Bank has announced that it will introduce a ‘climate factor’ into it’s monetary policy operations from mid-2026: https://www.ecb.europa.eu/press/pr/date/2025/html/ecb.pr250729_1~02d753a029.en.html 

• In 2021, 85 parliamentarians called for Andrew Bailey to help steer billions of pounds of finance away from risky fossil fuel investments and towards green, job-creating alternatives: https://positivemoney.org/uk/archive/85-lawmakers-tell-bank-of-england-to-get-banks-in-line-ahead-of-cop26/ 

• Mark Carney’s 2015 speech ‘Breaking the Tragedy of the Horizon – climate change and financial stability’ can be read here: https://www.bankofengland.co.uk/-/media/boe/files/speech/2015/breaking-the-tragedy-of-the-horizon-climate-change-and-financial-stability.pdf 

About Positive Money:

Positive Money is an international research and campaign organisation working to redesign our economic system for social justice and a liveable planet. 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 supporters. Find out more: www.positivemoney.org 

ENDS