UK financial services optimistic ahead of Mansion House speech

By Rebecca Delaney

July 14 - (The Insurer) - More than 80% of financial services leaders are confident that the UK government's financial services growth and competitiveness strategy will boost growth and attract foreign investment to the UK, according to a survey by KPMG.

UK Chancellor Rachel Reeves is set to announce the inaugural financial services growth and competitiveness strategy in her Mansion House speech on Tuesday.

Growth and competitiveness was introduced as a secondary objective for UK financial watchdogs in August 2023 under the Financial Services and Markets Act.

Reeves is also expected to outline phase two of the pensions review and update on the development of a captive insurance framework.

According to KPMG's UK financial services sentiment survey, published on Monday, sector optimism about the government’s growth plans has risen over the last six months.

The quarterly poll tracks sentiment among more than 150 leaders across the sector.

The survey found 88% of leaders are now confident that the government’s plans will attract foreign investment into the sector, compared to 68% in December 2024.

In addition, 86% of sector leaders are now confident the plans will boost sector growth and competitiveness, compared to 70% six months ago.

Confidence that the government’s growth plans will enhance the UK’s position as a leader in sustainable finance and fintech increased by 10 percentage points to 83% over the six-month period.

Respondents with lower degrees of confidence in the government’s plans underlined challenges related to national insurance and tax increases, inflation challenges and economic uncertainty.

More than three-quarters of respondents (77%) agreed that cutting red tape would support economic growth and sector competitiveness, but almost two-thirds (64%) said they were concerned about proposals to cut regulations at a time when risks to financial stability are rising.