The Bank of England has vowed to improve diversity and inclusion at the 326-year-old institution after an internal review found ethnic minority staff were less likely to be promoted and were paid less than white colleagues.

A hard-hitting report by the Bank’s Court of Directors revealed that ethnic minority candidates often failed to secure appointments and those that did found their white colleagues enjoyed greater opportunities for promotion, higher performance ratings and bigger bonuses on average.

It found that staff from ethnic minority backgrounds were more likely to leave the Bank and were under-represented at senior levels, with the Bank failing to meet its own targets for 13% of ethnic minority representation in top management roles by the end of 2020.

The experience of colleagues with different ethnic backgrounds has not reflected the kind of institution we want to be

The Bank also missed its 2020 targets for roles held by women in senior management roles, or those below.

The critical assessment of the Bank’s efforts to promote diversity also found that while pay and pay rises were on a par, ethnic minority employees received “significantly” smaller bonuses, due largely to lower performance ratings.

The near year-long review – led by Diana Noble, a non-executive director of the Bank’s Court – found that despite efforts to improve diversity and inclusion at Threadneedle Street, there was “still a long way to go”.

It made a long list of recommendations, including to make executive directors accountable for meeting diversity targets, which is linked to their pay.

Bank governor Andrew Bailey pledged to implement the report’s recommendations “in full”.

He said: “The experience of colleagues with different ethnic backgrounds has not reflected the kind of institution we want to be.

“Making the Bank a genuinely inclusive workplace is integral to getting the day job right.

“We need people to bring their different experiences to the table, and to represent fully the people of this country.”

The Bank has set itself more stretching targets to increase diversity by the end of February 2028 as a “first step” towards making improvements.

These include the goal for between 18% and 20% of senior managers to be black, Asian and minority ethnic (BAME) by 2028, and for 23% of BAME representation in roles below senior management.

It is also targeting 20% of new appointments at executive director and director level to be BAME and 10% of graduate intake to be Black.

While the review focused on ethnic diversity at the Bank, it has also set new gender targets, aiming for up to 44% of senior managers to be female and gender parity on new appointments at executive director and director level.

Ms Noble said: “I am left with an optimism that the great people across the Bank share Court’s vision of a fully diverse and inclusive Bank that they are proud to work for.

“And that they will want to play their own part in ensuring the recommendations from the Review are implemented and in time become just the way the Bank thinks and acts.”