Internal documents from the Bank of England suggest policymakers are exploring a radical new 'Green Tiered Rate' system, where banks could receive negative interest rates on reserves specifically used to fund net-zero transition projects.

The proposal would effectively provide a massive subsidy for green lending while keeping rates higher for traditional carbon-intensive sectors. It represents a significant shift in the Bank's role in the transition to a low-carbon economy.

"The mandate of the central bank must evolve with the challenges of our time," an anonymous source at Threadneedle Street told The British Wire.