Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 19 September 2025 to Question 76417 on Carbon Emissions, whether the Financial Policy Committee (a) is (i) monitoring and (ii) assessing evidence on the likelihood of planetary boundaries being breached and (b) has used its stress testing frameworks to assess the potential impact of climate tipping points on financial stability.

The Bank of England’s Financial Policy Committee (FPC) is responsible for identifying, monitoring and taking action to mitigate systemic risks to the UK financial system. In its November 2024 Financial Stability Report, the FPC explained its approach to assessing climate-related financial stability risks; it recognised the potentially irreversible impact of passing through climate tipping points; and it highlighted that the Bank of England was considering incorporating risks caused or exacerbated by climate change into future bank and insurance stress tests. This followed the Chancellor’s remit to the FPC in 2024 recommending the FPC to use its stress testing frameworks, where appropriate, to consider how climate risks could impact financial stability.