Parts of the Bank of England could be moved out of its historic base in London and relocated to Birmingham under Labour if it wins the next General Election.
The radical move would be designed to strengthen other regions, which have been described in a report commissioned by shadow chancellor John McDonnell as “underweighted in policy decisions”.
Other Labour proposals include establishing a new National Investment Bank and Strategic Investment Board in Birmingham, which is Britain’s second-biggest city.
Offices could also be set up in Glasgow, Cardiff and Belfast – with two smaller regional ones in Newcastle and Plymouth – as part of a shake-up to push investment into other parts of the UK.
The Bank of England is still known by the nickname The Old Lady of Threadneedle Street, and it has been based in the City of London since 1734.
Graham Turner of GFC Economics, who provided the report, warned more needs to be done to deal with geographic inequality.
He said: “Flow of funds analysis shows that banks are diverting resources away from industries vital to the future of this country.
“There is a risk that the disproportionate number of technology companies in London and the South East will increase, exacerbating regional inequality.”
Image: John McDonnell commissioned the report for Labour’s next manifesto
Mr McDonnell said: “This important report drums home the message that our financial system isn’t delivering enough investment across the whole country, and in the high-technology industries and firms of the future where it is needed most.
But City commentator David Buik, from broker Panmure Gordon, said: “If all the major banks are in London, how could the Bank of England do its job effectively and efficiently from Birmingham?”
The idea received a mixed reaction on social media, with some hailing it an “excellent” proposal, and others as “absurd” and “intriguing”.
“Then Parliament should come up to Leeds,” wrote one person on Twitter, while another suggested relocating “the House of Lords to Manchester”.
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Chair of the National Infrastructure Commission and former transport secretary, Lord Adonis, tweeted his strong backing of the idea and said the new offices should be located next to the new HS2 station at Curzon Street which opens in 2026.
Some tweeted the move would solve the sharp bend along the London Underground’s Central line platform at Bank station.