Climate-related risks to central bank independence: the depoliticisation and repoliticisation of the Bank of England in the transition to net zero

Abstract

ABSTRACT Faced with ever-growing climate-related financial risks, the role of central banks in climate governance has intensified debates surrounding central bank independence (CBI). Informed by elite interviews with UK monetary policy experts and a discourse analysis of Bank of England reports, this article reveals the internal views on repoliticisation of the Bank and CBI catalysed by the mandate to ‘facilitate the transition to net zero’. We find different interpretations of CBI that are shaped by perceptions of the Bank’s existing political status, with some claiming that the Bank is intrinsically apolitical and immune to repoliticisation and others viewing CBI as fragile or a strategically-deployed discourse. Across three distinct views of politics, and by extensions CBI, we identify dual dynamics of depoliticisation and re-politicisation that serve to legitimate and depoliticise prior mission creep whilst simultaneously licencing politicising debates on the bank’s institutional evolution. We demonstrate that the Bank of England is an indispensable case study in the green central banking literature for understanding the political economy of CBI within the context of climate change.