Rachel Reeves Delivers Keynote Speech at Mansion House 2026: Insights and Future Plans

Lady Mayor, Governor, Ladies and Gentlemen,

I extend my gratitude to the Lady Mayor for her remarks and to the City of London Corporation for graciously hosting us this evening. I would also like to acknowledge the invaluable contributions of the Financial Secretary, Economic Secretary, and Chief Secretary towards my address, as well as the exceptional Gwyneth Nurse and her dedicated team at the Treasury for their unwavering support.

As I stand before you for the third time as your Chancellor, I reflect on the belief I hold that the triumph of our world-renowned financial services sector benefits the entire United Kingdom. It is now two years since this government assumed office and I was appointed to my role. This evening, I wish to take the opportunity to look back on the choices I have made during this time, consider the current state of Britain’s economy, and explore the opportunities that lie ahead.

The Strength of the British Economy

It gives me great pride to report that the British economy is robust. At the beginning of this year, we experienced the fastest economic growth of any country in the G7. Last year, we witnessed a reduction in borrowing from 5.2% to 4.2% of GDP, marking the lowest level in six years. Investment, productivity, and wages are all on the rise. Additionally, NHS waiting lists are decreasing at the most rapid pace seen in the last 17 years, and half a million children are set to be lifted out of poverty over the course of this Parliament.

Had I predicted two years ago that we would find ourselves in this position today, many would have expressed doubt. Yet, we have defied the sceptics. Through strength, resilience, and determination, Britain has once more overcome the odds.

Addressing Economic Challenges

Upon taking office, I inherited an economy beset by multiple challenges. There was a public finance issue, with over £100 billion spent annually on debt interest, while capital investment was curtailed in favour of immediate fixes—projects promised but lacking financial commitment for execution. Additionally, our public services were in disarray, with crumbling school roofs, overcrowded prisons, and soaring hospital waiting lists. The economic landscape was fraught with sluggish growth, rising interest rates, and a cost-of-living crisis affecting the daily lives of ordinary citizens.

Since our election, I have methodically tackled each of these challenges. In my first Budget, I stabilised public finances while outlining a path towards fiscal consolidation to reduce borrowing costs. At the same time, I implemented bold changes to the fiscal rules, enabling an additional £120 billion investment during my Spending Review to restore public services and enhance critical housing, energy, and transport infrastructure necessary for economic growth.

Combating the Cost of Living Crisis

In my second Budget last year, I built upon these solid foundations to address the cost of living crisis. This included measures to curtail inflation by reducing energy bills, freezing prescription charges, and maintaining rail fares. I also doubled our fiscal buffers to safeguard both households and public finances from the increasingly frequent economic shocks we face.

The recent resurgence of hostilities in the Middle East has further tested our economic resilience, and the market’s reaction to these developments indicates that there remains work to do to shield our economy and our nation from a volatile global landscape. The actions I have undertaken thus far are rooted in a new approach to fostering sustainable and resilient economic growth throughout our country—an approach I term ‘securonomics’. This investment-led growth model for Britain advocates for an active and strategic state that makes informed and deliberate choices through fiscal stability, infrastructure investment, and economic reform.

Progressing Towards Radical Change

This government has demonstrated that change, even radical change, is achievable. The record of the past two years illustrates that meaningful progress is only possible when radicalism is paired with credibility. I have worked diligently to earn that credibility in opposition and have substantiated it in government through the actions I have taken since my appointment as Chancellor. To ensure the continuation of this radical change, it is vital to maintain that hard-won credibility and uphold the foundations upon which it rests.

Historically, radical governments lacking credibility have struggled to gain the trust necessary to advance their agendas, while credible governments without radicalism have seen their credibility wane when unable to meet the public’s justified impatience for change. The most successful governments have pursued a dual path of radical change and economic credibility.

Choices for a Prosperous Future

The work of transformation has commenced, and I am proud that the decisions I have made as Chancellor provide a solid foundation for the next Prime Minister to propel our country forward. I hold a deep optimism regarding our nation’s potential and the economic future that lies within our reach. However, that future is not guaranteed; it demands conscious choices.

In my recent Mais lecture, I outlined three significant choices we must embrace: firstly, fostering growth across every region of our country, moving away from the outdated notion that prosperity can arise from only a select few areas; secondly, undertaking a concerted effort to ensure that the jobs, industries, and innovations of the future are established here in Britain; and thirdly, addressing the repercussions of Brexit by cultivating deeper ties with our largest and closest trading partner, the European Union.

Investing in Regional Growth

Britain should not be a nation where opportunity and prosperity are confined to a select few locations, allowing the potential and resources of other areas to go untapped. This long-standing weakness in the British economy sets us apart from our global counterparts. Since the election, we have adopted a new strategy, increasing investment in regions across Britain and taking steps to dismantle the previous model that concentrated too much power in London.

To enhance regional investment, I have reformed the Treasury’s Green Book—our investment manual—ensuring that every region receives equitable consideration. I have also increased funding for city region transport, supported Development Corporations in our two growth corridors, and allocated resources to new place-based funds aimed at boosting defence, innovation, and creative clusters in our regions.

Empowering Local Leaders

Recently, I met with Mayors from across Britain. Their frustrations resonate with my own experiences as a Member of Parliament in Leeds for sixteen years—knowing the right priorities for your area but lacking the authority to execute them. Here too, we have made strides. This government has devolved more power in the past two years than its predecessors achieved over the last two decades. We have expanded integrated settlements to provide more Mayors with a single multi-year funding pot, granting them flexibility in allocating that funding.

We have introduced City Investment Funds, empowering established regional leaders with control over long-term, self-sustaining capital, enabling them to reinvest returns for further growth. Additionally, Mayors now have the authority to implement an overnight visitor levy. However, true devolution requires a far greater scale of action. In my Mais lecture, I proposed the next significant step: granting regional leaders control over a share of national taxes, including income tax and business rates.

Building a Strategic Economy

While we still have much to accomplish, the steps I have taken have placed us on a trajectory towards a lasting transfer of power and resources away from central government, fostering long-term investment, local accountability, and regional leadership to stimulate growth throughout the nation. Our economy thrives when an active and strategic state partners with businesses to innovate and compete on a global scale. This principle lies at the core of securonomics and our industrial strategy.

We must not shy away from technological advancements; instead, we must embrace them and chart a course for our economy’s evolution. We cannot allow our industrial base to decline, leaving us vulnerable to unpredictable global supply chains. We must recognise that economic security is intrinsically linked to national security. This is why we intervened to save British steel, safeguarding our capacity and ensuring that our infrastructure, industries, and security do not rely on foreign imports.

Championing Innovation and AI

Our support for the world-leading defence sector ensures that as global defence spending increases, the benefits and job opportunities will be realised here in Britain. Furthermore, I have amended our procurement rules to ensure that government contracts serve as a launchpad for British businesses rather than merely benefitting global incumbents. This approach allows us to prioritise British suppliers in critical sectors such as steel, shipbuilding, and now artificial intelligence.

AI represents the defining technology of our era. It is essential for our national security and our collective economic futures. I firmly believe that the role of a proactive and strategic state is not to retreat from the challenges posed by this new technology but to engage with them—seizing the opportunities presented by AI while remaining vigilant against potential risks.

Investing in the Future

This entails developing a comprehensive plan for AI sovereignty, supporting UK companies in securing pivotal positions within the AI landscape. We are advancing this through our Sovereign AI unit, our commitment to quantum technology, our AI hardware strategy, and the establishment of a new AI Economics Institute, ensuring that the future jobs we need are created right here in Britain.

The financial services sector is already at the forefront of innovation, leading the way in technology adoption and global competition. Today, I am unveiling the recommendations from the Transatlantic Taskforce on Markets of the Future, which I initiated with