The Bank of England is warning ministers that stability, not growth, is the top priority

The Bank of England has fired a warning shot at the government’s call to sweep away red tape. She emphasizes that her task, preventing “serious disruptions” to the economy, must be a priority.

Deputy Governor Sam Woods wrote to Sir Keir Starmer that while the central bank “strongly supports” the government’s objective of economic growth and encouraging responsible risk-taking, this was not its main focus.

Woods said: ‘There is a distinction between our primary objectives, which are to promote the safety and soundness of banks and insurers and the protection of policyholders, and our secondary objectives, to facilitate competition and growth.’

The head of the bank’s financial services watchdog, the Prudential Regulation Authority, added that economic instability could lead to “disruption of the ability of households and businesses to transact, manage risk and access credit ‘. Woods said this would amplify “economic shocks” and hinder growth.

It is a sharp response to a letter sent to regulators by Starmer, Chancellor Rachel Reeves and Business Secretary Jonathan Reynolds last month, encouraging watchdogs to be “more pro-growth and pro-investment”.

The Chancellor has backed plans to look at ways to enable mortgage risk-taking by lenders to make it easier for people to own their own home. Rachel Reeves told the Financial Times she welcomed proposals from the Financial Conduct Authority to lift limits on mortgages and was “open to ideas that could boost home ownership”.

Conflict of interest: Bank of England deputy governor Sam Woods told Keir Starmer that delivering economic growth and ‘encouraging responsible risk-taking’ was not the main focus

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