Chancellor Rachel Reeves will argue that boosting UK growth through financial reforms will help households nationwide. Her plan includes sweeping deregulation for City firms, aiming to spur investment and economic expansion.
On Tuesday, Reeves will announce the “Leeds reforms,” calling them the most significant financial rule changes in ten years. She claims cutting red tape will unlock growth, ultimately putting “pounds in the pockets of working people.”
“Financial services are central to our growth mission,” Reeves will say. “A thriving sector means more investment across the economy.” However, critics warn that deregulation could backfire, recalling the 2008 financial crisis.
Therefore, the reforms follow intense pressure from financial firms. Reeves has courted the City since before the election, aiming to keep its support. Yet economists fear repeating past mistakes.
Chaitanya Kumar of the New Economics Foundation said, “This feels like groundhog day. The 2008 crash should have taught us the dangers of deregulation.” He questioned whether boosting UK growth through financial reforms would truly benefit ordinary households.
Reeves will highlight relaxed mortgage rules as proof her strategy works. The Bank of England recently allowed riskier lending, potentially helping 36,000 first-time buyers yearly.
Nationwide already adjusted its policies, lowering income requirements for high-loan mortgages. Yet campaigners warn this could inflate housing prices and burden buyers with unsustainable debt.
Sara Hall of Positive Money said, “Looser rules mean bigger debts for families, not real affordability fixes.” She argued that without supply-side solutions, the reforms may fail.
The Treasury will also introduce a permanent mortgage guarantee program, covering lender losses on high-risk loans. Designed to encourage 95% mortgages, critics say it could expose taxpayers to bank failures.
Meanwhile, the Financial Conduct Authority (FCA) will cut transparency rules for companies listing shares. Firms now need only three days to publish prospectuses, down from six.
While Reeves pushes boosting UK growth through financial reforms, experts urge caution. Jesse Griffiths of the Finance Innovation Lab said, “Prioritizing global finance over domestic needs hasn’t worked before.”
He called for reforms that support green investment and local businesses instead. With housing and financial stability at stake, the debate over deregulation is far from settled.
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