There could be further supply side impacts from the structural economic change or repurposing that could be needed if the behavioural changes that we have seen in response to the pandemic persist, as seems highly likely, although the sign of these impacts is perhaps more ambiguous. The letter is available on the Bank’s website at https://www.bankofengland.co.uk/-/media/boe/files/prudentialregulation/letter/2020/info-request-operational-readiness-policyrates.pdf?la=en&hash=E973B09B00A6EC1D2B5AB9B845BF20EB5EF7BBB6. 14  9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  The November MPC decision isn’t for another two weeks and we have a full round of forecast and policy meetings to come between now and then. In these uncertain times, and with an array of risks to contend with, from Covid, from Brexit and from wider geopolitical developments, the MPC is clear that the range of actions that could be taken remains under review, consistent with our remit. I head into our upcoming meetings in the belief that we are equipped with an effective set of tools in our toolbox which we will be able to use to meet our remit, however the economy might evolve from here. Figure 10: Uncertainty around those projections was higher than usual and the risks were to the downside.
Alongside this, since 2019, the PRA and FCA have co-chaired the Climate Financial Risk Forum (CFRF) which has delivered a series of guides incorporating good practice ‘for industry, by industry’ which should enable firms to progress in response to the expectations in SS3/19. Where a proportionate approach is a firm’s preferred option due to lack of resources, the CFRF outputs should help to mitigate this issue. Update on regulatory reform It is worth noting that when carrying out its general functions (as opposed to taking individual supervisory decisions),5 the Financial Services and Markets Act requires the PRA to have regard to differences in the nature and objectives of different kinds of business organisation, including Mutuals. When making rules the PRA is required to consider and explain whether the rules would have a significantly different impact on Mutuals compared to non-Mutuals. This consideration is covered in our policy-making communications, including Consultation Papers and Policy Statements. The most significant package of policy consultation coming up – in 2022 – will be in relation to Solvency II. HM Treasury announced a review of Solvency II last year and the government has set three objectives for it: to protect policyholders and ensure the safety and soundness of firms, to support insurance firms to provide long-term capital to underpin growth, and to spur a vibrant, innovative and internationally competitive insurance sector. The package of policy changes will be designed to deliver on all three objectives.