Reeves to claim red tape cuts will have trickle-down effect

Reeves that deregulating the City comes with risks, pointing to the deep recession that followed the 2008 financial crash, when the last Labour government was forced to bail out major banks.

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Reeves will say: "I have placed financial services at the heart of the government's growth mission - recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving."

She will claim the changes would have "a ripple effect that will drive investment in all sectors of our economy and put pounds in the pockets of working people". They follow strong lobbying by the City, which Reeves wooed before the election and has fought to keep on side throughout Labour's first year in power.

Chaitanya Kumar, the head of economy and environment at the New Economics Foundation thinktank, warned: "It feels like groundhog day. We've been here before, expecting the financial sector to do most of the heavy lifting in terms of growth.

"The 2008 crash and what followed should have been a very strong lesson to everybody in not completely letting the financial services sector off its leash, but that's what we seem to be doing."