HMT issues 2025 remit and recommendations to FPC for 2025/26

HM Treasury (HMT) has published a letter from Rachel Reeves, Chancellor of the Exchequer, to Andrew Bailey, Bank of England Governor, setting out the remit and recommendations for the Financial Policy Committee (FPC) for 2025/26. The letter reaffirms the FPC's objectives to maintain UK financial stability and support the government's economic policy. The letter also highlights the need for regulation that balances resilience with growth, aligning with the Financial Services Growth and Competitiveness Strategy and the Leeds Reforms. Key priorities include reviewing the level of bank capital requirements, which should ensure the UK's capital framework strikes the optimal balance to deliver resilience, growth and competitiveness. Ms Reeves also looks forward to the FPC's findings on where there is potential to increase the ability of the financial sector to contribute to sustainable economic growth. The next steps in this work should identify how to support the supply of long-term capital for productive investment. The letter also highlights the critical nature of the FPC's work in the light of challenges for the global financial system such as the adoption of transformative technologies, climate change and the net zero transition, while also facing global macroeconomic uncertainty.

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