Rachel Reeves Outlines Economic Reform Agenda in Mansion House Speech

 

On 15 July 2025, Chancellor Rachel Reeves delivered her second Mansion House speech, outlining the new government’s economic priorities and plans for regulatory reform. The speech focused on enabling investment, supporting homeownership, and reviewing key financial regulations.

Central to the speech was the Leeds Reforms, a package of financial regulatory proposals focused on investment opportunities and reducing friction in the system. Reeves outlined a broad review of financial regulation, including the ring-fencing regime that separates retail and investment banking, capital and reporting requirements for banks, the Senior Managers & Certification Regime (SMCR), and the remit and powers of the Financial Ombudsman Service. Framing these changes as necessary for unlocking investment and easing unnecessary constraints on capital, Reeves signalled a shift toward a more growth-oriented regulatory approach.

Firms operating in financial services could see lighter regulatory burdens and more flexibility, encouraging greater innovation and capital deployment. For investors, new opportunities could open as banks and financial firms adapt to a more dynamic framework.

Reeves described the current regulatory landscape as restricting business activity and said the government aims to enable more productive use of capital. This signals a potential easing of constraints that have previously limited growth for businesses, potentially unlocking new funding sources and accelerating expansion plans.

In relation to personal finance, Reeves stated the government would encourage retail investment by promoting stocks and shares ISAs over cash ISAs. She also indicated there would be steps taken to improve public access to investment advice. For everyday savers and retail investors, this could signal better returns on savings through more accessible investment products and improved guidance to make informed choices.

On housing, the Chancellor proposed a relaxation of current mortgage affordability criteria. The Treasury estimates that 36,000 additional mortgages could be issued in the first year if higher loan-to-income borrowing is permitted for first-time buyers. This relaxation potentially indicates that for young buyers, securing a mortgage will be easier, while mortgage lenders could see and increased demand.

The Chancellor also confirmed that the Pension Schemes Bill will remain in place. She stated that the government does not anticipate needing to use the legislation’s mandate powers for pension funds, citing expected voluntary alignment with investment objectives.

In relation to financial services, Reeves set a long-term target to double UK financial services exports by 2035. She also stated that the government would continue work to promote the UK as a global centre for green finance and financial technology. This ambition presents growth opportunities for firms in fintech, sustainable finance and export-oriented financial services, reinforcing the UK’s position as a global financial hub.

The speech was delivered in the context of recent economic data, with UK inflation in June being 3.6% and core inflation at 3.7%. Analysts expect the Bank of England to consider cutting interest rates in August.

The Mansion House speech signals the government’s intent to conduct broad financial regulatory reviews and implement policy measures aimed at encouraging lending, investment, and economic growth.