Rachel Reeves to channel Margaret Thatcher and promise the City a 'new era' of deregulation to boost economy
The Chancellor will try to put some desperately needed boosters under Britain's stuttering economy by luring big financial firms to Britain.
In her hotly-anticipated Mansion House speech, Ms Reeves will tell banking bosses to forget New York and Paris and bring their staff to London or Leeds instead.
But she is under massive pressure as the economy is shrinking and millionaires are fleeing Britain over sky-high taxes.
A Treasury source said: 'Millions of Brits work in financial services, but for too long red tape and excessive regulation has choked off innovation and growth in the economy.
'Well, no more. Britain is entering a new era. We will slash regulation and make the UK the best place in the world to do business.
'Forget Paris, New York and Frankfurt - come to London, Leeds and Edinburgh.
'Rachel is determined to create a new Big Bang which will turbocharge growth in the economy for a new generation to put more pounds in people's pockets.'
The Big Bang refers to the deregulation of the London Stock Exchange carried out by Margaret Thatcher in the mid 1980s.
It put rocket boosters under the City and established London as a leading financial centre.
Ms Reeves will use her speech to announce moves to slash red tape on banks and financial services companies.
It will be her first big speech since Ms Reeves was caught on camera crying during PMQs.
The Chancellor is facing massive questions about her economic strategy after the economy shrank for the second month on the trot in May.
And the annual Henley Private Wealth Migration Report revealed that 16,500 millionaires are set to leave the UK over the next 12 months - far more than China and Russia put together.
A senior Labour frontbencher told The Sun on Sunday that tax hikes in the autumn Budget "look inevitable".
They said: "Taxes are going to have to go up. Most of us expect the income tax threshold freeze to be extended."
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Telegraph
17 minutes ago
- Telegraph
Labour opens door to tax raid on middle-class
Labour has opened the door to higher taxes for middle-class workers in the autumn Budget. Heidi Alexander, the Transport Secretary, said on Sunday that the Government had promised not to put up taxes for 'people on modest incomes'. Asked if tax rises should be expected in October, the Cabinet minister said that 'fairness' would be the 'guiding principle' for the Government when it came to taxation. It comes after Lord Kinnock, the former Labour leader, said that the party was 'willing to explore' a wealth tax, such as a 2 per cent levy on asset values above £10 million. When asked if the proposals had been raised during the 'away day' for Cabinet ministers at Chequers on Friday, Ms Alexander said: 'Not directly at the away day.' She told Sky News' Sunday Morning with Trevor Phillips: 'I think your viewers would be surprised if we didn't recognise that at the Budget the Chancellor will need to look at the OBR (Office for Budget Responsibility) forecast that is given to her and will make decisions in line with the fiscal rules that she has set out. 'We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that. 'We haven't put up income tax. We haven't put up VAT apart from taking away those VAT tax reliefs that people who send their children to private school get, and we obviously haven't put up employee National Insurance.' Asked if tax rises should be expected in the autumn, the Transport Secretary said: 'So the Chancellor will set her Budget. I'm not going to sit in a TV studio today and speculate on what the contents of that Budget might be. 'We are determined when it comes to taxation, fairness is going to be our guiding principle.' Labour has repeated the promise not to increase taxes on 'working people', but the Transport Secretary's comments mark a shift in the language surrounding taxation. Workers also face paying more in tax even without any additional rises in the Budget, if Rachel Reeves, the Chancellor, chooses to maintain the freeze on income tax thresholds further than 2027-28. Keeping the threshold for the additional rate of income tax frozen at £125,140 for a further five years would push the number of workers paying the levy to 8.66 million, according to figures from wealth manager Quilter, seen by The Telegraph. It would mean around one in six earners would fall into the top tax bracket, up from just one in 33 today. It came as Eluned Morgan, the First Minister of Wales, piled pressure on Sir Keir Starmer by saying that wealth taxes were 'not a bad idea'. She told the Sunday Mirror: 'I think that people with the broadest shoulders should carry more of the burden. 'I don't know all of the levers available, but the idea of taxing people earning over £10 million is not a bad idea,' she said. Sir Keir is already facing calls for a wealth tax from many of his own backbenchers, who have also argued that Ms Reeves should break her fiscal rules and borrow more. The Government has ruled out any change to the fiscal rules, but ministers are now openly talking up a wealth tax in some form. A Downing Street spokesman said this week that Sir Keir is 'committed to the wealthiest in society paying their share in tax'. As recently as April, Ms Reeves told The Telegraph she could categorically rule out tax hikes for the richest, revealing: 'We're not interested in a wealth tax.'
Finextra
26 minutes ago
- Finextra
Deep Dive: Monzo's Business, Explained: By Sam Boboev
Monzo has emerged as one of fintech's standout success stories – a digital bank that now boasts over 12 million customers and a profitable business model. In an industry where many challengers are still chasing sustainable unit economics, Monzo has redefined what banking can be – and where it's going. Launched in 2015 as a scrappy startup, Monzo set out to 'build a current account that lives on your smartphone and gives you control of your money'. A decade later, it has grown into Britain's largest digital bank and even reached full-year profitability – all while cultivating a devoted user base and an NPS around +70 (versus an industry average of 30). Monzo matters because it exemplifies how a relentless focus on customers can translate into both rapid growth and real revenues. This deep dive examines Monzo's evolution, from its early days and expanding product portfolio to the technology under the hood, its business strategy, international forays, and the financial journey toward profit. Monzo's trajectory offers a blueprint for fintech innovation: prove that 'mission, growth, [and] profit' can go hand in hand. By 'bringing together the best of technology and banking, and remaining customer obsessed,' Monzo has shown it's possible to delight users while building a sustainable bank. Let's explore how Monzo got here and where it's heading next. From Bold Idea to Banking License Monzo's story began in 2015, when a team led by Tom Blomfield founded the company (originally called Mondo) with the aim of creating a branchless, app-based bank. The vision was clear from the start: a bank 'that lives on your smartphone', delivering instant notifications, intuitive budgeting, and a user-friendly experience starkly different from high-street incumbents. Early on, Monzo launched Alpha and Beta prepaid debit cards to test the waters, rapidly gaining a waitlist of enthusiastic early adopters. This grassroots momentum was amplified by record-setting crowdfunding campaigns – in 2016, Monzo raised £1 million in 96 seconds from customers eager to own a part of the bank. By late 2018, Monzo had topped one million users, with 95% of its initial cardholders seamlessly migrating to its new current accounts once those launched. Growth came almost entirely through word of mouth, reflecting a passionate community that Monzo actively nurtured via forums and transparency reports. Regulatory milestones came quickly. Monzo obtained a UK banking license with restrictions in 2016 and, after rigorous testing, had those restrictions lifted in April 2017 – officially becoming 'a fully authorised, unrestricted bank'. This allowed Monzo to transition all customers from prepaid cards to full Monzo current accounts, each with a sort code and FSCS deposit protection. 'Today is a major step towards making [our] mission a reality,' CEO Tom Blomfield wrote at the time, crediting Monzo's community of users for fueling its early success. Throughout 2017–2018, Monzo rolled out core banking features like Monzo me (for easy P2P payments) and Targets (budgeting goals), while maintaining an ethos of openness – Monzo famously shared product roadmaps and engaged users in feedback through its 'Making Monzo' forum. By 2019, Monzo was solidifying its position as a mainstream player. It became the UK's most recommended brand according to YouGov and saw more people switching their primary accounts to Monzo than to any other bank. The bank introduced pioneering app features that competitors would later emulate – Salary Sorter to auto-budget paychecks, Bills Pots to segregate funds for expenses, and Get Paid Early to receive BACS payments a day in advance. All these innovations, alongside the vibrant coral debit card and real-time notifications, helped Monzo build a reputation for making money feel easy. Despite the challenges of 2020's pandemic (when lockdowns briefly dampened card spending), Monzo kept investing in its product. 'As the world shut down, we stayed focused on our customers... delivered new products and invested heavily in key areas of our business,' said TS Anil (who took over as CEO in 2020). That resilience paid off: customer growth remained robust – climbing 23% year-on-year in FY2021 – and engagement deepened even faster. Fast forward to 2023 and Monzo had swelled to around 7½ million personal customers (plus hundreds of thousands of business users) and was ranked as the 7th largest UK bank by customer numbers. It also consistently topped independent surveys for service quality, reflecting the loyalty of its base. Remarkably, 66–90% of Monzo's customer growth came organically via referrals in these years – a testament to its product-market fit and brand love. A typical Monzo user had 30+ friends on Monzo too, underscoring a viral network effect. Monzo's journey from a bold idea in 2015 to a fully licensed, multi-million-user bank within a decade is impressive on its own. But equally notable is how Monzo evolved its product lineup beyond a simple checking account to become a broad financial platform. Evolving the Product Portfolio Monzo's initial offering was a simple app-linked account, but over time it has broadened into a one-stop shop for personal finance. Today, 'Monzo's now a place where you can budget, spend, save, borrow, invest, track your mortgage, insure your contents, and combine your pensions.' This product diversification did not happen overnight – it was a deliberate expansion, year by year, often driven by customer demand and experimentation. Everything still 'starts with our personal current account,' as Monzo likes to say. The personal account (with its bright 'hot coral' debit card) remains Monzo's flagship, offering features like instant spend notifications, fee-free spending abroad, and easy money management. Monzo also provides joint accounts for shared finances, and in 2023 it introduced accounts for 16-17 year-olds, eventually followed by Under 16s accounts in 2025 to help the next generation manage money digitally. On the business side, Monzo launched its business accounts in 2020 after a period of testing. By FY2024, Monzo Business had over 400,000 customers (up from 200k the year prior), ranging from sole traders on free accounts to larger SMEs paying for premium plans. Monzo's business banking has been well-received – for the past two years it's been rated Britain's most recommended business account for overall service quality in independent surveys. To monetize its robust retail base, Monzo rolled out premium account tiers in 2020. Monzo Plus (re-launched in July 2020 after an earlier iteration faltered) and Monzo Premium (launched later in 2020) offer advanced features for monthly fees. Plus (originally £5/month) added perks like custom budgeting categories, interest on balances, and virtual cards, while Premium (at £15/month) tacked on benefits like phone insurance, higher interest, and a metal debit card. These proved popular with Monzo's power users: within the first year, over 134,000 customers signed up for Plus or Premium. By FY2022, Monzo reported 360,000+ combined subscribers across Plus, Premium, and paid business accounts. Subscription uptake contributed meaningfully to revenue – by 2021, 25% of Monzo's revenue was coming from new products (like Plus/Premium and business accounts). Notably, Monzo has continued iterating on its plans. In 2023, it even made some formerly paid features free for all (for instance, releasing its 'most powerful budgeting tools' to the entire user base) to drive engagement, while simultaneously enhancing the paid tiers with new benefits. The result: by FY2025 Monzo had 1 million+ customers on subscription plans, and subscription fee income grew 50% year-on-year. Helping customers grow their money has become a major focus for Monzo. Early on, Monzo pioneered the idea of 'Pots', sub-accounts where users can set aside money for goals. Over 300,000 Pots are created by users each month (as of FY2021-22), underscoring how integral this feature is to Monzo's experience. Initially Pots were just simple piggy-banks, but Monzo soon partnered with third-party banks to offer Savings Pots that paid interest. By 2019 it launched a 'savings marketplace' in-app, letting users open interest-bearing Pots provided by the likes of Investec or OakNorth without leaving Monzo. In February 2023, Monzo took this further by introducing Instant Access Savings powered directly by Monzo. This product, rolled out to both personal and business customers, ensures users benefit from every Bank of England rate increase – Monzo explicitly passes on the majority of base rate rises to savers. The response was tremendous: within a year, more than 1.3 million customers had opened Instant Access Savings Pots, collectively saving £7.7 billion in them. Monzo paid out over £130 million in interest to those customers in the first year alone. This strategy of sharing interest yields helped Monzo deepen trust – it's telling that as of 2025, customers have entrusted Monzo with £16.6 billion in deposits (up 48% from the previous year). Monzo is also dabbling in investments and pensions, making the app even more of a financial hub. In late 2023, Monzo launched Monzo Investments, allowing users to invest in curated funds with as little as £1. The user experience emphasizes guidance and simplicity, aiming to demystify investing for first-timers. Indeed, Monzo found that a third of its investing customers were investing for the first time ever – with women, in particular, embracing this (45% of female investors on Monzo were first-timers). On the pensions side, Monzo introduced a feature to 'combine your pensions' in 2025, likely through a partnership, helping users consolidate old pension pots into one – further embedding Monzo in long-term financial planning. And for homeowners, Monzo added a mortgage tracking tool in 2023 so users can link their existing mortgage and monitor repayment progress in-app. While Monzo doesn't (yet) offer its own mortgage lending, this integration keeps customers engaged and sets the stage for potential future offerings. Like any full-service bank, Monzo provides credit products – but with Monzo twists. It started with overdrafts (introduced around 2018) and later personal loans, offering eligible users quick cash at competitive rates via the app. In September 2021, Monzo unveiled Monzo Flex, a 'buy now, pay later' style credit option allowing users to spread purchases over installments. As Monzo put it, Flex lets you 'pay later for pretty much anything' – unlike other BNPL services limited to certain merchants. Flex was essentially Monzo's take on a credit card, but managed in-app with transparency. It attracted 35,000 customers in short order and later evolved into Monzo's credit card lineup: today Monzo markets 'Flex' as a credit card (with 19% APR variable) and has even launched a 'Flex Build' credit card aimed at helping those with thin credit histories build up their score. For a challenger that once eschewed lending, these credit products have become a key part of the portfolio and revenue mix. Monzo reported that by FY2024, total card spending volume grew 42% year-on-year to £47.8 billion – a clear sign that users are increasingly routing their everyday spending through Monzo's cards, generating interchange fees and interest income on credit balances. Source: Monzo Annual Reports (2021–2025); Monzo Investor and Press Releases; Monzo Blog and Web Pages. Disclaimer: Fintech Wrap Up aggregates publicly available information for informational purposes only. Portions of the content may be reproduced verbatim from the original source, and full credit is provided with a "Source: [Name]" attribution. All copyrights and trademarks remain the property of their respective owners. Fintech Wrap Up does not guarantee the accuracy, completeness, or reliability of the aggregated content; these are the responsibility of the original source providers. Links to the original sources may not always be included. For questions or concerns, please contact us at
The Independent
an hour ago
- The Independent
Chancellor guided by ‘fairness', senior minister says of calls for wealth tax
The Government will be guided by 'fairness' on tax, a senior Cabinet minister said when asked if tax rises are coming in the autumn budget. Transport Secretary Heidi Alexander would not rule out tax rises in the budget as she toured the broadcast studios on Sunday morning. She also told Sky News's Sunday Morning With Trevor Phillips programme that Cabinet ministers did not 'directly' talk about the idea of a wealth tax – as advanced by unions and former Labour leader Lord Neil Kinnock – during an away day at the Prime Minister's Chequers country estate this week. Chancellor Rachel Reeves has refused to rule out tax rises at the budget since Labour MPs forced ministers to make a U-turn on welfare reforms, which the Government had hoped would save up to £5 billion a year. Fiscal watchdog the Office for Budget Responsibility (OBR) this week warned that the UK's state finances are on an 'unsustainable' path due to a raft of public spending promises the Government 'cannot afford' in the longer term. Meanwhile, economists have warned Ms Reeves on several occasions that her fiscal headroom – the leeway within the Government's self-imposed spending rules – could be eroded by unexpected economic turns. Ministers are committed to not raising income tax, national insurance and VAT – the three main taxes which affect working people – to pay for their plans. Lord Kinnock last week suggested a wealth tax could 'commend' the Government to the general public and help it bolster the public funds while not breaking its existing pledges. Union leaders, including Sharon Graham of Unite, are also pressuring ministers to consider the move. Asked by Sky News if such a tax had been discussed at the Cabinet away day on Friday, Ms Alexander said: 'Not directly at the away day.' Pressed on what she meant by not directly, the senior minister replied: 'I think your viewers would be surprised if we didn't recognise that, at the budget, the Chancellor will need to look at the OBR forecast that is given to her, and will make decisions in line with the fiscal rules that she has set out. 'We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that.' Asked again if this meant there will be tax rises in the budget, Ms Alexander replied: 'So, the Chancellor will set her budget. I'm not going to sit in a TV studio today and speculate on what the contents of that budget might be. 'When it comes to taxation, fairness is going to be our guiding principle.'
