Chancellor Rachel Reeves has announced what the Treasury describes as the “biggest financial regulation reforms in a decade”, aiming to unlock economic growth by cutting red tape in the UK financial sector. The plans, revealed at the Mansion House dinner in London’s Guildhall on Tuesday evening, include loosening rules, boosting innovation, and allowing lenders to offer mortgages at more than 4.5 times a buyer’s income.
Reeves told City bosses that the changes would be about “freeing up firms to take risks and to drive growth”. She added: “We have been bold in regulating for growth in financial services and I have been clear on the benefits that that will drive: with a ripple effect across all sectors of our economy putting pounds in the pockets of working people.”
The measures, also branded the “Leeds reforms” after a summit in West Yorkshire, are widely seen as a major win for the City following intense lobbying. They come as Reeves seeks to reset her agenda after a turbulent first year in power, including a difficult spending review and criticism over welfare cuts.
However, the deregulatory push has sparked fears among centre-left thinktanks that excessive risk-taking could repeat the mistakes that led to the 2008 financial crash. Critics argue that loosening financial rules and encouraging riskier lending may create instability, with concerns that the government is prioritising growth over safeguards.
Reeves is said to be under significant pressure, but remains a close ally of Prime Minister Sir Keir Starmer, sharing a common project focused on economic growth. The reforms are intended to send a positive message about her plan to grow the economy and deliver benefits to working people, despite warnings of potential consequences.
