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Bank of England reinstates climate as a priority

#ukbudget

 

Although the UK's first Labour budget in 14 years provides a positive signal on climate action, it falls short of being an "environment-friendly" budget. There is still a lot of work to be done to decarbonize the UK economy and reach net zero by 2030.

 

The UK's capital budget will be set over five years and will be extended every two-year review. This provides greater clarity and predictability regarding the government's plans. The government also plans to spend over £35 billion on economic infrastructure over the next decade.

 

The government's commitment to green technology in the next decade is welcome, such as the allocation of £3.9 billion for the development of carbon capture and storage technologies. However, it is still important that the focus is on reducing emissions. In addition, it committed another £2.7 billion to the development of the Sizewell C nuclear power plant.

 

The National Wealth Fund's high-level ambition is commendable. It aims to generate over £70 billion of investment and achieve returns that are equivalent to gilts.

 

The Bank of England's decision to reinstate climate as a priority was a positive step. It also confirmed that the UK will proceed with its plans to establish a carbon border adjustment mechanism, which will cover various sectors, beginning in January 2027. This will provide investors with more certainty and encourage low-carbon investments.

 

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