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 is reportedly calling 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, with the Bank of England slashing its growth forecasts for the UK economy in half last week, 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 a key factor, Budget tax hikes are also being attributed, with the rise in employers’ national insurance and the minimum wage putting pressure on firms.
Services inflation has fallen further than expected, while wage growth is expected to “slow significantly” by the end of 2025, the Bank’s MPC said.
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 now disappeared, and she is likely to either have to cut spending or lift taxes to make it up.
The meeting with Reeves comes as the banks starts their earnings results season, with Barclays starting 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 the expansion of UK airports, and backing for nuclear energy.