Government plans to deregulate the financial sector are set to spark a battle between politicians and the Bank of England.
Former chancellor Rishi Sunak is set to publish his so-called ‘Big Bang 2.0' on Wednesday, which would see ministers given the power to challenge regulatory decisions made by the central bank, reports International Investment sister title Investment Week.
This will be supported by current chancellor Nadhim Zahawi, while outgoing prime minister Boris Johnson is reportedly losing patience with the bank's resistance to the proposed Solvency II regime.
Bank of England: Eight major risks facing UK economy
The trio believes that a bonfire of regulation would create a "nimble" regime and unlock funds for investment, while BoE governor Andrew Bailey (pictured) is seeking to ensure any new regulation does not increase risk.
Sunak's "Brexit manifesto" read: "We will finish the job of ending the EU system where ultimate power lies with faceless regulators and vest that power in our sovereign parliament."
Bailey is reportedly pushing back against these plans, with one senior government official saying the governor "is not too happy".
