Andy Burnham's political operation, spearheaded by Louise Haigh, has been drawing up plans to re-examine the Bank of England's mandate as part of preparations for a potential Burnham government. The move would mark a significant departure from three decades of Bank independence established by Gordon Brown in 1997, and signals that Burnham's team wants to show it is prepared to govern differently, particularly on economic policy.

The proposal centres on whether the Bank's remit, currently focused solely on meeting a 2% inflation target set by the chancellor, should be broadened to include better coordination with government and a greater focus on growth. Economists argue that recent "supply-side shocks" from events such as Covid, the Ukraine war and the Iran conflict have made interest rates an increasingly blunt and costly tool, with critics including thinktank New Economics Foundation warning the current framework risks a "doom loop" of high rates choking growth without effectively tackling shock-driven inflation.