Rising cost of insuring against climate crisis will have wider knock-on effects for UK economy

Automatisch samengesteld met AI uit de vermelde bronnen

Chocolate alone contributed roughly 1 percentage point to UK food inflation in 2025, driven by extreme heat in west Africa, Bank of England MPC member Swati Dhingra said, while a report from TheCityUK and Marsh warned that the increasing frequency and severity of climate hazards is eroding insurers’ confidence in traditional actuarial models, creating protection gaps that could disrupt bankability and orderly economic activity. Dhingra added that using higher interest rates to neutralise climate-driven food and energy price shocks raises the cost of borrowing for net-zero investment, and the report called for public or hybrid backstops to arrest a cycle in which underpricing of risk stifles adaptation spending.