Bank of England Outlines Financial Policy Framework to Support UK Economic Welfare

The Bank of England is evolving its financial policy framework to support economic welfare in the UK. The framework aims to prioritize and guide financial policy by explicitly connecting to the ultimate goal of economic welfare. The financial system's critical role in providing services to households and businesses is central to this framework. The Bank's Financial Policy Committee (FPC) focuses on identifying and mitigating systemic risks that could disrupt the provision of vital financial services. The FPC uses three operating modes: identifying risks, monitoring them, and taking action. The framework will help evaluate policy actions and choose between alternatives, weighing up both benefits and costs. The Bank is also assessing the supply and allocation of finance and services to businesses. They are working with the government and other stakeholders to consider ways to unlock potential investment in long-term productive UK assets. The Bank is also reviewing housing market policies to ensure they are proportionate and efficient, without reducing overall resilience.