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Bank of England warns ministers top priority is stability, not growth

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Conflict of interest: Bank of England deputy governor Sam Woods told Keir Starmer that achieving economic growth and

The Bank of England has fired a warning shot at the Government’s call to cut red tape, insisting its task of preventing “serious disruption” to the economy must take priority.

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

Woods said: “There is a distinction between our primary objectives, 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 “a disruption in the ability of households and businesses to transact, manage risk and access credit.” “. Woods said this would amplify “economic shocks” and hamper growth.

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

The Chancellor has backed plans to look at ways to allow lenders to take on more mortgage risk to make it easier for people to own their own homes. Rachel Reeves told the Financial Times she welcomed the Financial Conduct Authority’s proposals to lift limits on mortgages and was “open to studying ideas that could boost home ownership”.

Conflict of interest: Bank of England deputy governor Sam Woods told Keir Starmer that achieving economic growth and “encouraging responsible risk taking” was not his main objective

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