Rachel Reeves to meet bank bosses as growth agenda stalls
Chancellor Rachel Reeves is set to meet top bank bosses this week in the latest attempt to kickstart her growth agenda.
The embattled Labour chancellor has reportedly called in top executives at Barclays, Lloyds Banking Group, NatWest and Nationwide, according to Sky News’ Mark Kleinman.
This comes as the government’s growth strategy continues to falter. The Bank of England slashed its growth forecasts for the UK economy as it cut interest rates.
The Bank also predicted inflation will rise to a peak of 3.7 per cent in the third quarter of this year, a significant upgrade on its previous assessment of 2.8 per cent.
While global factors such as energy prices were key factors, Budget tax hikes are also being attributed, with the rise in employers’ national insurance and the minimum wage putting pressure on firms.
Some analysts raised concerns about so-called ‘stagflation‘, where there is low growth and rising inflation.
The Bank’s MPC said that services inflation has fallen further than expected, while wage growth is expected to “slow significantly” by the end of 2025.
The Chancellor is under huge pressure after outlining supposedly ironclad fiscal policies, including not raising certain taxes or reducing spending. But her ‘fiscal headroom’ has reportedly disappeared, and she will likely have to cut spending or lift taxes to fill a growing gap in the government’s spending plans.
The meeting with Reeves comes as the banks start their earnings results season, with Barclays reporting this week on Thursday.
Rachel Reeves has been looking to court sections of the economy to kickstart her growth hopes, unveiling a major industrial and infrastructure plan earlier in the month, including expanding UK airports and backing for nuclear energy.
Recently Rachel Reeves and business secretary Jonathan Reynolds met with a group of watchdogs as they kickstart plans to cut red tape, and push growth.
Banks mentioned have been approached for comment. The Treasury has also been approached for comment.