Kemi Badenoch addressed the City of London this week, urging regulators to lift risk limits after the sector suffered under former prime minister Liz Truss. She warned that Britain has become too risk‑averse and that safety‑first rules now stifle growth. Her speech signals a Tory shift back toward financial capitalism in the UK economy today.

Badenoch emphasized that pension funds, insurers, banks and private investors have pulled back from UK assets amid regulatory burdens. She criticised the Treasury’s recent reserve‑power proposal that would mandate pension investment. The Tory leader also highlighted that compliance costs swallow about 15 per cent of their turnover, a figure banks say hampers competitiveness for the industry.

Industry voice Miles Celic of TheCityUK said cross‑party consensus exists on key issues, but implementation lags. He called for faster action on tech, regulation and tax simplification to keep the City competitive. Badenoch’s pitch arrives as Reform UK also promises to shift banking regulation from the FCA back to the Bank of England in 2024.

The speech underlines the Tory agenda to reverse post‑Truss regulatory tightening. Investors will watch whether the party can deliver on easing red tape without compromising oversight. The City’s reaction will shape the UK’s financial‑services competitiveness and determine if the market can regain confidence in a less risk‑averse regime for future growth and investment in 2024.