Reeves calls for economic growth talks with bank chiefs, after 'Stagflation' warning

9 February 2025, 18:31

The chancellor, Rachel Reeves, has called a meeting with some of Britain's biggest bank chiefs to discuss economic growth.

Rachel Reeves will meet with some of Britain's biggest bank chiefs to discuss economic growth, after 'Stagflation' warning earlier this week.

Executives from Barclays, Lloyds Banking Group, HSBC, Nationwide and Natwest have been invited to meet with Reeves on Wednesday.

Sky News has learnt that the meeting will discuss the government's financial services growth strategy.

Expected attendees include:

• Georges Elhedery, HSBC Holdings' CEO
• Paul Thwaite, NatWest CEO
• Charlie Nunn, the Lloyds Banking Group chief
• Debbie Crosbie, CEO of Nationwide
• Senior representatives from Santander UK and Barclays

Sky News contacted the Treasury for comment.

This comes as a Bank of England forecast, published on Thursday, halved growth expectations for 2025, while predicting stronger growth in subsequent years and cutting interest rates.

Thursday's news will have been a blow for a Government with growth at the heart of its plans, and the Prime Minister began the official Cabinet session with a focus on the economy.

The meeting also saw Chancellor Rachel Reeves point to support for the third runway at Heathrow as a model for boosting growth - a decision that is said to have caused some friction with Net Zero Secretary Ed Miliband.

Mr Miliband has previously voted against a third runway, but pushed on the issue on Friday morning said he would "abide by collective responsibility", while stressing that any plans for a runway had to "pass strict environmental conditions and meet our carbon budgets".

Other areas touched on during the meeting included engagement with businesses, plans to reform public services and the Government's plans for artificial intelligence.

US tariffs, even if not imposed directly on the UK, could also hit growth.

"If there were to be tariffs that contributed to a fragmentation of the world economy, that would be negative for growth for the world economy. I hope that doesn't happen, but that could happen," Bank of England Governor Mr Bailey said.

"The impacts on inflation are much more ambiguous."

Head of money and markets at Hargreaves Lansdown Susannah Streeter said: "The risks of stagflation are stark.

"Inflation remains above the Bank's two per cent target and price pressures are piling up, but the economy is stagnating, and business confidence has taken a knock."

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Yesterday, Sir Keir Starmer told ministers they could "either be the disruptors or the disrupted" at the start of a marathon Cabinet meeting on Friday after economic 'Stagflation' warnings.

His comments began a roughly six-hour meeting with his top ministers at Lancaster House in Westminster, during which he urged them to "increase the pace of change" against a background of global and domestic instability.

During an initial political Cabinet, without Civil Service officials, the Prime Minister took aim at "right-wing populists" who claimed to be "on the side of working people" but could only offer "grievances not solutions", according to a readout of the meeting.

While he praised civil servants, he also warned that caution was "hard-wired" into Whitehall and called for ministers to do more to reform public services and deliver on the Government's agenda.

Adopting the language of Silicon Valley, he said: "My reflection is that while we are working away the world is speeding up.

"We can either be the disruptors or the disrupted."

The meeting comes as the Government finds itself still searching for economic growth amid deteriorating poll numbers, a rise in support for Reform UK and the looming threat of tariffs from the new Trump administration in Washington that could derail Labour's economic plans.