Bank of England to ban coal‑linked bonds for key loans from October

Campaigners have hailed a policy shift after the Bank of England announced that, from October, it will no longer accept bonds tied to thermal‑coal projects for its key loan arrangements. The decision targets assets linked to the combustion of coal in power stations, a sector identified as one of the most carbon‑intensive sources of electricity worldwide. By excluding these bonds from its financing framework, the central bank aims to align its lending practices with the United Kingdom’s net‑zero commitments and to reduce exposure to high‑emission industries.

The move is expected to pressure commercial banks to reassess holdings of fossil‑fuel‑related securities, as the Bank of England’s stance sets a precedent for broader financial sector standards. Environmental groups view the ban as a tangible step toward curbing investment in coal, reinforcing years of advocacy that have urged lenders to divest from activities contributing significantly to climate change. Observers note that the policy could accelerate the transition to cleaner energy financing, while also prompting further regulatory scrutiny of other high‑carbon assets.