The UK government will close $20bn of its foreign exchange reserves and stop paying interest on its foreign assets to encourage new investment, Prime Minister Theresa May said in a speech to the Bank of England.
She said the government was committed to increasing its exports and increasing the UK’s exports to emerging markets and the developing world.
May said the Government was committed, “to doing everything in our power to support new investment in the UK economy and ensure the UK remains a globally competitive nation, as well as a secure and attractive place for our people to invest.”
May announced the changes in a short speech to members of the Bank’s Monetary Policy Committee.
The changes, which are due to be implemented by July, will see the Bank begin to reinvest money from overseas assets into the UK.
They will be a gradual process and will be gradual, she said.
The UK government said it was planning to spend more than $50bn on new investment over the next five years and that it would be a priority to increase the number of companies that were able to operate in the country, build new factories, and attract foreign direct investment.
She also said that the government would “continue to support and support the UK by setting up an independent regulator, the Financial Conduct Authority, which will be responsible for oversight of financial institutions.”
The move will likely prompt a backlash from some members of Parliament, particularly those from the right wing of the Conservative Party.
Britain is one of the few EU countries to retain its national currency and to maintain it as a reserve currency.