HM Treasury has issued the 2025 remit for the Bank of England’s Financial Policy Committee (FPC), setting expectations for the year ahead. Dated 26 November 2025 and published alongside Budget 2025, the letter instructs the Committee to maintain UK financial stability while, subject to that, supporting the government’s economic policy. ([gov.uk](https://www.gov.uk/government/publications/remit-and-recommendations-for-the-financial-policy-committee-budget-2025/remit-and-recommendations-for-the-financial-policy-committee-budget-2025))
The government defines its economic goal as restoring broad‑based and resilient growth, with price and financial stability as prerequisites. The strategy points to a stable macroeconomic framework, sustained investment via sound public finances, supply‑side reform under a targeted industrial strategy, and a competitive financial sector aligned with the net zero transition. ([gov.uk](https://www.gov.uk/government/publications/remit-and-recommendations-for-the-financial-policy-committee-budget-2025/remit-and-recommendations-for-the-financial-policy-committee-budget-2025))
The remit restates the statutory framework in the Bank of England Act 1998. Under sections 9C–9E, the FPC must contribute to the Bank’s Financial Stability Objective and, subject to that, support the government’s economic policy; it should not act in ways that, in its opinion, would materially reduce the financial sector’s capacity to support medium‑ to long‑term growth. The Chancellor also asks the FPC to explain publicly how its actions use the powers in section 9S(2), including how it balances risks and manages any conflicts between its objectives. ([gov.uk](https://www.gov.uk/government/publications/remit-and-recommendations-for-the-financial-policy-committee-budget-2025/remit-and-recommendations-for-the-financial-policy-committee-budget-2025))
Risks in non‑bank finance remain a central focus. The FPC is asked to continue building resilience across NBFIs and core sterling markets, drawing on international work and insights from system‑wide stress exercises. HM Treasury welcomes the Bank’s exploratory discussion on strengthening the gilt repo market and notes the development of a Contingent Non‑Bank Repo Facility as part of the toolkit for market stress. ([gov.uk](https://www.gov.uk/government/publications/remit-and-recommendations-for-the-financial-policy-committee-budget-2025/remit-and-recommendations-for-the-financial-policy-committee-budget-2025))
The remit highlights the external environment. The Committee should assess how the global outlook and geopolitical risk are reflected in markets and how they may affect domestic stability, maintaining active surveillance and readiness to adjust macroprudential settings where needed. ([gov.uk](https://www.gov.uk/government/publications/remit-and-recommendations-for-the-financial-policy-committee-budget-2025/remit-and-recommendations-for-the-financial-policy-committee-budget-2025))
Operational risks, including cyber threats and concentrated dependencies on third‑party providers, are identified as material to financial stability. The FPC is asked to monitor the implementation and outcomes of the new critical third parties regime as part of wider operational resilience work, alongside vigilance on risks from emerging technologies such as artificial intelligence. ([gov.uk](https://www.gov.uk/government/publications/remit-and-recommendations-for-the-financial-policy-committee-budget-2025/remit-and-recommendations-for-the-financial-policy-committee-budget-2025))
Climate and nature‑related risks are to remain embedded in the Committee’s risk assessment. HM Treasury asks the FPC to consider physical and transition risks over appropriate horizons and, where suitable, reflect severe global climate scenarios within stress‑testing frameworks, while continuing to assess the materiality of nature‑related risks. ([gov.uk](https://www.gov.uk/government/publications/remit-and-recommendations-for-the-financial-policy-committee-budget-2025/remit-and-recommendations-for-the-financial-policy-committee-budget-2025))
On the interaction of objectives, the Chancellor backs the FPC’s review of the overall level of bank capital to ensure the framework supports resilience while also enabling growth and competitiveness. The Committee is asked to identify measures that increase the supply of long‑term capital for productive investment, especially to help high‑potential firms scale. ([gov.uk](https://www.gov.uk/government/publications/remit-and-recommendations-for-the-financial-policy-committee-budget-2025/remit-and-recommendations-for-the-financial-policy-committee-budget-2025))
Housing credit policy features in the letter’s narrative. The government notes recent changes to the FPC’s mortgage recommendation aimed at proportionate implementation of the loan‑to‑income (LTI) flow limit. Regulators have raised the de minimis threshold to £150 million so smaller lenders are outside scope, and the FPC has clarified that individual firms may exceed the 15% high‑LTI share provided the aggregate across lenders remains consistent with 15%. These steps are intended to expand access for creditworthy first‑time buyers without raising systemic risk. ([beta.bankofengland.co.uk](https://beta.bankofengland.co.uk/prudential-regulation/publication/2025/july/amendments-to-pra-rulebook-fca-guidance-de-minimis-threshold-loan-income-policy-statement?utm_source=openai))
Capital markets are explicitly referenced. The FPC is asked to act with a view to supporting the government’s ten‑year Financial Services Growth and Competitiveness Strategy and the Leeds Reforms, including efforts to reinvigorate listings, strengthen retail participation and improve the UK’s offer to high‑growth firms, while safeguarding financial stability. ([gov.uk](https://www.gov.uk/government/publications/remit-and-recommendations-for-the-financial-policy-committee-budget-2025/remit-and-recommendations-for-the-financial-policy-committee-budget-2025))
Accountability and communications are tightened. The FPC is asked to reduce uncertainty through clear indicators, consistent messaging and predictable policy where possible. When proposing legislative changes, it should evidence the risks, expected effectiveness and proportionality. Engagement with industry and experts should be open, with supporting analysis and, wherever practicable, quantitative impact estimates including private compliance costs; consultation periods should be proportionate to impact. ([gov.uk](https://www.gov.uk/government/publications/remit-and-recommendations-for-the-financial-policy-committee-budget-2025/remit-and-recommendations-for-the-financial-policy-committee-budget-2025))
For institutions, the practical read‑across is clear. Banks should plan for outcomes from the capital framework review and continue monitoring NBFI interlinkages, including repo market capacity in stress. Asset managers, pension schemes and insurers should expect continued scrutiny of liquidity risk, margining and core markets’ functioning. Firms relying on major technology providers should prepare for information‑sharing and resilience testing under the critical third parties regime once designations commence. Mortgage lenders should align credit policies with the clarified LTI approach while maintaining aggregate discipline. The FPC will set out actions and explain its response to these recommendations in its records and Financial Stability Reports, as required by the Treasury’s remit process. ([fca.org.uk](https://www.fca.org.uk/publications/policy-statements/ps24-16-operational-resilience-critical-third-parties-uk-financial-sector?utm_source=openai))