Protection gap projections
The proportion of UK mortgage borrowers without insurance could rise from around 5% currently to between 7% and 10% by 2050, reaching 16% after a severe flood event, according to Bank of England modelling. Speaking at a sustainable finance conference in Mexico, James Talbot, the Bank's Executive Director for International, said insurance alone cannot address the problem, noting that better data, adaptation investment and resilient infrastructure are essential to keep cover affordable and available.
Wider economic implications
The central bank highlighted that extreme weather can disrupt production and supply chains, contributing to price pressures. With the UK importing around 40% of its food, overseas weather-related damage can feed into domestic prices and affect monetary policy goals. Talbot noted that while monetary policy cannot repair physical damage or restore harvests, central banks must assess how such disruptions affect persistence in inflation.