Britain cannot grow without ‘fighting fit' finance sector, Rachel Reeves says
'Today, I have placed financial services at the heart of the Government's growth mission, recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving,' she told the attendees.
She said the Government was delivering on its pledge, made at last year's Mansion House speech, to 'regulate for growth and not just for risk'.
The Treasury announced a package of reforms on Tuesday aimed at attracting more investment to the UK, and among individual consumers, to help grow the economy.
Ms Reeves said this involves 'rolling back regulation that has gone too far in seeking to eliminate risk', with plans to cut red tape in the City and reform banking rules including the ring-fencing regime.
The UK is currently an outlier in forcing banks to separate their retail and investment banking activities, so reforms are hoped to make Britain more competitive globally.
Ms Reeves also highlighted efforts to boost retail investment which she said is currently presented 'in a negative light, quick to warn people of the risks without giving proper weight to the benefits'.
Plans include potentially changing the language of risk warnings on investment products to encourage more people, particularly women, to take the leap.
The Leeds Reforms – named after one of our financial services' hubs and a city I'm proud to represent – will deliver the biggest package of reforms to financial services regulation in a decade.
Kickstarting economic growth and putting more pounds in people's pockets. pic.twitter.com/efN8YEHLPZ
— Rachel Reeves (@RachelReevesMP) July 15, 2025
Furthermore, the Chancellor said new powers to mandate pension funds to invest in UK assets were 'sending a clear signal' that the Government and industry want to deliver higher returns for savers and more investment for the economy.
'But I am confident that I will not need to use that power because firms see the urgency and importance of this as clearly as I do,' she said.
The 'Leeds reforms', unveiled in the West Yorkshire city, are set to be the biggest set of reforms to financial services for more than a decade, according to the Government.
But the Chancellor concluded her speech by saying: 'As I look ahead, it is clear that we must do more.
'In too many areas, regulation still acts as a boot on the neck of businesses, choking off the enterprise and innovation that is the lifeblood of growth.
'Regulators in other sectors must take up the call I make this evening not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Statesman
19 minutes ago
- New Statesman
Britain's billionaire tax problem
Rachel Reeves gives the Mansion House speech on 15 July (Photo by) After last night's Mansion House speech, in which Rachel Reeves promised an audience of City financiers that she would reduce regulation of financial services and encourage risk-taking by investors, the Public Accounts Committee has released a report this morning which suggests the state isn't doing the greatest job of taxing the wealthiest in society. 'HMRC does not know how many billionaires pay tax in the UK or how much they contribute overall,' the report finds. This sounds bad. It will certainly lead to even louder calls for a wealth tax from the left of the Labour Party and groups such as Patriotic Millionaires. But does HMRC need to know who's a billionaire? Campaigners will doubtless be incensed by the revelation that 'HMRC has no overview of an individual's total wealth,' and that 'despite the relatively small number of individuals and significant sums of money involved', HMRC can't identify how much tax billionaires in the UK pay. But the point of HMRC is to implement tax law, and because the UK does not currently have a wealth tax, it does not actually have a duty to target billionaires specifically. What the PAC's report really shows is not that HMRC is allowing billionaires to get out of paying tax, but that a wealth tax targeting billionaires would be very difficult to implement. HMRC's job is to target activity – income from work or the sale of assets – rather than assessing how rich individuals are and trying to tax them on that basis. The reason for this is that it is much easier to identify taxable events than it is to identify taxable assets. As the report also notes, hundreds of billions of pounds' worth of those assets are held offshore, behind structures that make their ownership unclear. The easier option is to tax them when they're sold. Implementing a wealth tax of (for example) 1 per cent on assets over £10 million would require HMRC to do regular full market valuations of the assets of tens of thousands of people. Many of them would dispute they were as rich as HMRC claimed, and rightly so. After all, the 52-week range in value for the FTSE 350 index is over 15 per cent. Someone who is a billionaire in March might be a piddling centimillionaire by June. New perverse incentives might be introduced – such as the incentive to devalue the value of your company stock at a certain point each year to minimise your wealth tax liability. The more direct 'wealth taxes' that are collected in the UK are on property ownership – council tax and business rates – and are therefore not actually collected by HMRC, but by local authorities. One option for taxing wealth more would be to simply allow councils to add new council tax bands at higher rates for bigger properties. HMRC has (as the PAC's report also notes) made significant gains in the tax it collects from wealthy individuals. I have reported extensively on HMRC's failings and am only too happy to point out when it doesn't know something that it should. But in this case, HMRC has no need to know how much a poorly defined group of 'billionaires' contributes – and until the tax system changes, it has no need to do so. Subscribe to The New Statesman today from only £8.99 per month Subscribe [See also: The OBR is always wrong] Related
The Guardian
19 minutes ago
- The Guardian
UK inflation rise makes it clear: the cost of living crisis has not gone away
For anyone hoping the Bank of England will pick up the pace of interest rate cuts – including Rachel Reeves – there was little comfort in Wednesday's inflation data. The consumer price index increased at a higher than expected rate of 3.6% in June, the Office for National Statistics (ONS) revealed. That remains in line with the Bank of England's expectation of an inflation 'hump' over the summer; but the upward pressure is not just confined to the regulated prices, such as transport fares and utility bills, that policymakers knew would rise. Motor fuels are the main factor behind the upward shift in CPI from 3.4% in May, according to the ONS. The price of a litre of petrol is not rising – it fell by 0.5p between May and June. But it was plunging this time last year, so the smaller monthly decline puts upward pressure on inflation. There were a number of other drivers, too, including a 7.9% jump in air fares between May and June. The ONS has said the price of a flight always tends to increase in June as the summer season starts, but this was the fastest such increase since 2018. Food prices have also continued to be strong, rising at an annual rate of 4.5% – the fastest since February last year. The ONS cites price rises for several foods, including cakes and cheddar. The costs of furniture and household goods made their largest contribution to inflation since December 2023. In other words, the jump in inflation does not seem to be a one-off quirk, but reflects price pressures across a range of goods and services. The 'core' rate, excluding volatile fuel, food, cigarettes and alcohol, rose to 3.7% in June, from 3.5% in May. Given the Bank was predicting that headline inflation would peak at 3.7%, this reading seems unlikely to blow an August rate cut off course, with markets still putting the probability of a reduction at that meeting at 83%. But the members of the monetary policy committee (MPC) who would like to pick up the pace of cuts may struggle to win others over without more signs of weakness. As Ian Stewart, the chief economist at Deloitte, put it: 'Inflation is expected to fall back towards the end of this year, but in the meantime the pressure on the Bank of England will be to keep interest rates higher for longer.' Continued high inflation is unlikely to do much for consumers' mood, either, underlining the sense that the cost of living crisis has never quite gone away. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The independent MPC member Catherine Mann suggested in an interview on Tuesday that the sheer unpredictability of prices could be contributing to caution about spending. 'The prices of things have changed so much and are variable so that you don't know exactly how much you are going to need to get you to the end of the month,' she told the Business in Wales website. 'People are keeping a little bit of a rainy-day fund or a little bit of a savings buffer. For example, they're putting off taking that vacation or that holiday that they until they can get a sense of what their finances are.' Strong real wage growth in recent months may have helped – something Reeves highlighted in her Mansion House speech on Tuesday. But households are unlikely to be feeling particularly upbeat if, as Mann says, they are not sure where the next painful price rise is coming from.
The Guardian
25 minutes ago
- The Guardian
UK inflation rises unexpectedly to 3.6% driven by food and fuel prices
UK inflation unexpectedly rose in June driven by fuel and food prices, according to official figures, underscoring the challenge facing the chancellor, Rachel Reeves. The Office for National Statistics said the consumer prices index rose by 3.6% last month, up from a reading of 3.4% in May. City economists had forecast an unchanged reading. Richard Heys, the acting chief economist at the ONS, said: 'Inflation ticked up in June driven mainly by motor fuel prices, which fell only slightly, compared with a much larger decrease at this time last year. 'Food price inflation has increased for the third consecutive month to its highest annual rate since February of last year. However, it remains well below the peak seen in early 2023.' The rise comes as Labour faces intense scrutiny over its economic management after two months of negative growth and with speculation mounting over tax rises. Reeves sought on Tuesday to shrug off Britain's anaemic growth performance at her Mansion House speech, telling City bankers she would slash red tape to help reboot the economy. The UK's annual inflation rate has risen this year after dramatic increases in water bills, energy costs and council tax – complicating the Bank of England's approach to cutting interest rates. Threadneedle Street forecasts inflation will peak at 3.7% in September – almost twice its 2% target rate. Highlighting the pressure on households, the latest snapshot showed the annual inflation rate for food and drink jumped to 4.5%, the highest recorded since February 2024, driven by the rising price of cakes, meat, milk, eggs and cheddar cheese. Motor fuel prices fell by 9% in the year to June 2025, compared with a drop of 10.9% in the year to May. Because prices fell by less than a year earlier, this contributes to pushing up the annual inflation rate. While the average petrol price fell to 131.9p a litre last month, compared with 145.8p a year earlier, the drop between June and May was 0.5p, versus a much larger 3p fall between the same two months in 2024. Diesel prices also fell less sharply than a year earlier, with a month-on-month decline of 0.6p a litre in June 2025, compared with a drop of 4.8p in 2024. The average diesel price fell annually from 151.5p to 138.5p a litre. While the Bank has cut its base interest rate four times in the past year, most recently in May, to 4.25%, economists warned that evidence of lingering high inflation could delay further reductions. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Services inflation, a measure the central bank views as a better guide to domestically generated price pressures than the headline rate, unexpectedly held steady at 4.7% in June, led by the largest June increase in air fares since 2018. City economists had predicted a modest fall to 4.6%. However, concerns are growing over the strength of the UK economy amid a slowdown in the jobs market and as Donald Trump's erratic trade war weighs on the global outlook. Official figures due on Thursday are expected to show a further cooling in the labour market in the three months to May. Suren Thiru, the economics director at the Institute of Chartered Accountants in England and Wales, said: 'While June's hot inflation won't deter policymakers from sanctioning an August policy loosening, given mounting worries over economic conditions, these figures may increase caution over the pace of future rate cuts.' Business leaders had warned that Reeves's £25bn increase in employer national insurance contributions, introduced in April, would force them to cut jobs and pass on the costs to consumers by raising their prices. Mel Stride, the shadow chancellor, said Labour's tax decisions were adding to pressure on households. 'This morning's news that inflation remains well above the 2% target is deeply worrying for families.' Reeves acknowledged there was 'more to do' to put more money into people's pockets. 'I know working people are still struggling with the cost of living. That is why we have already taken action by increasing the national minimum wage for 3 million workers, rolling out free breakfast clubs in every primary school and extending the £3 bus fare cap,' she said.
