Standing open-armed, UK is choosing investment over decline

In my first budget as UK Chancellor of the Exchequer, I vowed to restore economic stability and kickstart a decade of national renewal. Economic growth is the number one priority of this British government.

A huge part of my job is to promote the UK as a place where people — including European businesses — “invest, invest, invest”.

Our International Investment Summit in October resulted in nearly 38,000 jobs set to be created across the UK thanks to a total of £63 billion (€75.4bn) in investment commitments from businesses around the world to drive sustainable growth. A vote of confidence in the UK.

A UK built on the rock of economic stability is a UK that is a strong and credible international partner.

In my maiden speech at Mansion House in the heart of the City of London last week, I made clear how this government will drive growth and investment in the UK.

I directly addressed an audience of bankers, business leaders, and financial professionals, telling them that we would work hand in glove with the financial services sector — the engine of the wider economy — to power the UK into a new age of prosperity.

But we will be anything but inward-looking in achieving this. I want to reset the UK’s relationship with the European Union and our other international partners.

We are economically and commercially intertwined. In the year to June 2024, 41% of all UK exports of goods and services were to the EU — totalling £352 billion (€421.4bn) — and over half of all our imports were from the EU.

But there is always more to do and the right conversations have started. I hosted European Commissioner Mairead McGuinness in the Treasury in September to discuss opportunities for future collaboration and look forward to working with her successor.

I will also travel to Brussels next month to attend a Eurogroup meeting — the first UK finance minister to do so since the Brexit referendum.

It's time to drive growth not just for the UK, but across Europe

This government has always said that it will not reverse Brexit, or re-enter the single market or the customs union. But we do want congenial and productive cooperation with our closest neighbours.

The UK advocates open, well-regulated financial markets. As Europe’s most popular destination for foreign direct investment in financial and professional services, we remain committed to creating an ecosystem that is accessible and open to innovation, but also recognise the importance of international regulatory standards. Balanced regulation must support growth.

We will ensure that the UK’s open financial markets support growth and deliver investment not just for the UK but across Europe.

Fresh strategy to nurture the growth of British financial services is key to this government. As I announced in my Mansion House speech, I will publish the UK government’s first-ever Financial Services Growth and Competitiveness Strategy in the spring.

We will focus on five priority growth areas based on the UK’s existing strengths in financial services: fintech, sustainable finance, investment management, international insurance and reinsurance markets, and capital markets — all intended to help drive growth across the UK.

Stable economy, stable partner

To inform this strategy we have published a call for evidence, to seek views on what the sector needs to thrive. The City of London is truly global and I look forward to engaging with international stakeholders on their important perspective.

We are also keen to learn from international partners. Following my visit to Toronto in August — and looking at the Australian market too — we plan to create megafunds through consolidating defined contribution Local Government Pension Schemes to unlock around £80 billion (€95.8bn) of investment for infrastructure projects and businesses of the future.

My first Mansion House address represents a fresh vision for the British financial services industry. It will become more dynamic and more robust, and better drive the growth the UK needs to the benefit of our international partners.

A UK with strong foundations and a stable economy translates into a UK that is a stable partner to our friends in Europe.

We are choosing investment over decline. And we stand open-armed to cooperate with our international partners to achieve this.

The Rt Hon Rachel Reeves MP serves as the United Kingdom's Chancellor of the Exchequer.