Ratesetters at the Bank of England will be asked to reflect climate change risks in their decision-making for the first time under Treasury plans.
The chancellor is expected to introduce environmental clauses into the Bank’s mandate when he updates it at the budget in March. Treasury officials have been in talks with the Bank on the design of a green monetary policy but a final decision has yet to be taken. Climate change considerations are already in the Bank’s financial stability mandate, which includes stress testing lenders against global warming risks, but monetary policy remains strictly focused on price stability and supporting economic objectives.
The Treasury has put the environment at the heart of its economic plans and recently launched the first green sovereign bond.
