Mr Sunak said the new bank, which will unlock more than £40bn of investment in the UK, was a “really tangible sign of us making progress on delivering our ambitions for levelling up”.

The base at The Embankment, by the River Aire, will be able to buy £5bn of equity in UK infrastructure projects as well as lending £7bn and guarantee loans of £10bn.

And the Chancellor, who is also MP for Richmond, said its aims were to invest in infrastructure such as road and rail but also digital, as well as helping to meet the UK’s climate change ambitions.

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Speaking in Darlington, where he met with officials involved in the setting up of a new Treasury North campus before heading to Leeds, he said the bank would have “quite a broad remit”.

He told The Fond News: “Within that it will have lots of different products, and lots of different things it will do. And it will be run at an arm’s length from the Treasury so it has an independent operation to make sure that there’s good governance over what it does.

“It’s going to be capitalised with £12bn to start, which is significant compared to anything else we’ve done like this in the past, and then it will have the ability to bring in money from the private sector.

“So in aggregate, it will support about £40bn of infrastructure investment over a period of time, which is huge.”

Opponents have pointed out that the scale of its operations is dwarfed by the national investment banks in France and Germany. And the Office for Budget Responsibility said it had “not adjusted our economy forecast” in light of the bank’s creation because of the bank’s small size and expected limited impact.

The Fond News understands that it will eventually employ 200 people and the vast majority, including its chairman and CEO, will be based in the city.

As the UK’s second centre for banking, over 28,500 people are employed in major banks and building societies in the Leeds City Region.

And Mr Sunak praised the location, which he said had “the busiest train station in the country and [is] home of the infrastructure revolution”.

He added: “And the thing I love about Leeds is it’s a financial services centre already, so outside of London, it’s one of our leading if not the leading financial services centre, so I think actually it’s going to be in a very good company.”

According to Henri Murison of the Northern Powerhouse Partnership, the new bank “can and should prioritise two of the greatest challenges facing this century – reaching Net Zero and rebalancing the UK economy”.

He said: “The Northern Powerhouse already has world-leading green energy infrastructure including offshore wind in the North Sea.

“With the right investment and partnership with local government, we can build on these capabilities to create more skilled jobs, while helping us reduce emissions as governments around the world will commit to do further at COP26 this autumn.

“We need a renewed focus on sectors such as nuclear including delivering UK-made Small Modular Reactors, growing the hydrogen economy and developing carbon capture and storage technology – as Drax has already committed to in the cluster from the Humber to the Tees.”