Bank of England Governor Andrew Bailey said on Tuesday he does not support changing core financial rules that protect stability, even as the government pushes for regulatory reform to boost growth.
He told lawmakers the central bank is open to adjusting certain details, such as mortgage income thresholds, but warned against weakening rules that separate retail and investment banking.
Bailey defended the bank’s ring-fencing regime, saying it helps manage troubled banks and does not place the UK at a disadvantage compared to other countries.
Finance Minister Rachel Reeves recently said she wants to reform those rules and described regulation as a “boot on the neck of businesses,” a term Bailey rejected. “We can’t compromise on basic financial stability,” he said.
Speaking to Parliament’s Treasury Committee, Bailey appeared with fellow Financial Policy Committee members Randall Kroszner and Carolyn Wilkins. Kroszner said no conflict currently exists between stability and the planned easing of regulations, but noted risks in the details.
Bailey also raised concern over government efforts to get pension funds to invest in infrastructure and other long-term assets. He said forcing such moves could cause “unforeseen consequences,” although he acknowledged the importance of reform and industry cooperation.
Reeves has said she prefers not to use new legal powers to mandate those investments but wants the option in future. Bailey also commented on rising UK borrowing costs, saying the increase in long-term bond yields matches global trends and is not specific to Britain.
He said the shift reflects broader worries over trade and public borrowing. U.S. policies, including tariffs and tax cuts under President Donald Trump, are also affecting global debt markets.
