Chancellor Rachel Reeves’s Mansion House speech on 15 July 2025 came at a time of increasing uncertainty in the UK. Inflation remains above target and the latest GDP figures showed a decline for the second month in a row. Against this backdrop, political tensions have been simmering, with a great deal of scrutiny placed on Reeves’s recent Spending Review, the Mansion House speech, and intentions for the Autumn Budget.

Speculation had been rife that this speech would see Reeves cutting cash ISA allowances to try and push more saver’s money into the stock market. However, in a week of surprises, Reeves’s speech was far less dramatic than had been anticipated. Moving away from comments around changing ISA allowances, she delivered a speech detailing the government’s ambitions to kickstart the UK financial landscape.

The Economic and Political Backdrop

The UK economy has been in a tough spot in recent months. Inflation figures were reported for June, with the Consumer Price Index rising to 3.6%[1]. This was ahead of the Bank of England’s 2% target, and up from 3.4% seen in May. Transport, particularly motor fuel, and clothing and footwear, were some of the biggest drivers. However, although food prices also rose for the third consecutive month, it is still at a level well below the peaks seen in early 2023. Additionally, GDP is reported to have declined in May, falling by 0.1%[2]. This was due to declines in manufacturing and construction.

Politically, the Labour government has been facing challenges and scrutiny, including a high-profile U-turn on disability benefit reforms, which has heightened concerns about fiscal discipline and policy consistency. Questions remain around how Reeves’s Spending Review will be funded and the threat of rising taxes looming, provided a challenging backdrop for the Mansion House speech.

A Speech Focused on Stability and Long-Term Reform

While the Mansion House speech was less dramatic than anticipated, it marked a clear continuation of the government’s ambition to reshape the UK’s financial landscape. Reeves stated she believes the “UK is the best place in the world for financial services” and stated that it is “at the heart of the government’s growth mission” . She outlined a strategy that she believes will unlock its full potential.

ISAs

Although Reeves had pivoted away from making a move to change allowances, ISAs remained a hot topic. She stated that Long Term Asset Funds (LTAF) will be able to be included in stocks and shares ISAs from April 2026. LTAFs provide access to long-term, less liquid assets, such as infrastructure and private markets. This broadening of access has been met positively. Whilst no further policy moves were announced, Reeves made it clear that ISA reform remains under consideration, and will “consider further changes… engaging widely in coming months”[3].

IPOs, Private Markets and Innovation

Reeves made clear she wants to reinvigorate the UK financial landscape. Increasing access to private markets re-iterating that the government will launch PISCES, a stock exchange for private company shares. Trading is set to start later this year and could open up access to high-growth private markets for a broader range of investors.

Additionally, Reeves focused in on efforts to get the UK IPO (Initial Public Offering) pipeline moving again. IPOs are when a private company sells shares to the public for the first time and becomes listed on a stock exchange. Reeves announced a new Listings Taskforce within the Office for Investment, as well as a simplification of the listing process in efforts to attract more IPOs to the UK. If you look at the number of IPOs that have been listed on the London Stock Exchange over time you can see some clear trends:

In recent years, the IPO trend has become more sluggish, with a decline in the pipeline following the 2021 boom. Reeves has outlined plans that would make the process of go to market for companies wishing to IPO easier, removing that point of friction. The Financial Conduct Authority has stated this would more closely align the UK with other international peers. As you can see from the chart, a healthy IPO pipeline can be a good indicator and important part of a thriving financial market, and it will be interesting to see if Reeves’s plans bring more companies to list publicly.

Unlocking Investment Culture

A core part of the Chancellor’s speech was about unlocking investment culture within the UK. She flagged that the UK has one of the lowest rates of retail investing amongst any of the G7 countries. The government also made note of a study that 29 million adults in the UK have sums of cash sitting in low-interest rate accounts[7]. They highlighted the divergence of outcomes between investing into stocks and shares versus a cash account, using the following examples for £2000 invested over 20 years:

As compelling as these examples are, it is important to acknowledge the risk-reward elements. Whilst holding too much of your assets in cash may be viewed negatively, due to the opportunity costs of missed growth opportunities and erosion of value due to inflation, having access to cash is important! An emergency fund of easily accessible cash can be a good way of managing any unforeseen expenses that come up. Additionally, stocks and shares can be volatile. They can go down as well as up and you may get back less money than you invested.

The Chancellor also discussed risk. Whilst acknowledging its importance, she highlighted that she is pushing for a balance between risk warnings and understanding the value of investment. There is a plan to review the current approach to risk warnings and launch a targeted advertising campaign to promote the benefits of retail investing3. Investing can be complex and overwhelming and it is clear that Reeves understands this and wants to make it more accessible.

What This Means for You

These reforms could signal a more dynamic financial environment going forward. However, they also introduce new complexities and risks. Access to private markets may increase, but careful due diligence will be essential. As Reeves looks to improve access to investing, there is likely going to be more of a push to put any spare cash to work. Investing can be a good way to protect your funds from the devaluing impacts of inflation, however there are risks involved and time factors to consider. Your planner will be able to provide you with some guidance on what the correct balance of saving and investing might be for you.

The question of government funding also remains ever present. And whilst Reeves backed away from changing ISAs at this stage, it is clearly not off the agenda completely. Close attention will be paid to the Autumn Budget, with rumours of tax hikes likely to gain traction.

Navigating this complex environment remains challenging, with so much going on it can be overwhelming. But the messaging from Reeves was very supportive of a thriving financial industry which could bring positive change. We will continue to monitor developments closely and provide updates to you as news unfolds. And in the meantime, if you have any questions about how this might affect your financial plan, please get in touch with your financial planner.

The information in this article should not be regarded as financial advice. Information is based on our understanding in July- 2025. Investment growth isn’t guaranteed and it’s possible that you could get back less than you paid in. Aberdeen is not responsible for the information, accuracy and views of external sources.