City banks are alarmed by the prospect of Ed Miliband Chancellor fears becoming reality as Andy Burnham weighs his first Cabinet appointments. Senior industry figures told City AM that a Miliband appointment at Number 11 would threaten the deregulatory agenda and open the door to fresh levies on the sector.
‘Ed Miliband would be a disaster… I just don’t think he believes in a deregulated system,’ one senior UK banking source told City AM. ‘He’s suspicious of bankers who he thinks can exploit customers.’
The same source said the industry would prefer Wes Streeting or Jonathan Reynolds, citing their ‘understanding [of] the free market.’
Ed Miliband Chancellor Fears Rattle Investment Banking
Julian Morse, chief executive of investment bank Cavendish, said markets would react ‘in a worse way’ for Miliband than for Streeting. Morse said the energy secretary had the ‘wrong angles’ and that markets would ‘come off a bit if he became Chancellor.’
A second industry source said: ‘I’m not sure if it will be Ed anymore but it would be the biggest concern.’
Miliband’s standing appeared to weaken over the weekend after the head of Unite union warned the energy secretary would be a ‘noose around the neck’ of job creation. John Cronin, banking analyst at Seapoint Insights, said: ‘The weakening of Miliband’s prospects is undoubtedly welcome from a banking sector standpoint.’
Burnham is expected to address the City in coming weeks, promising to reduce the national debt and the cost of borrowing while setting a growth vision within existing fiscal rules, according to The Times. Should he run uncontested for the Labour leadership, he could take office around mid-July.
Deregulation Agenda and the Financial Services and Markets Bill
Industry concerns go beyond personnel. Banking sources fear the sector will be treated as a target for new taxes and that planned reforms, including ring-fencing changes and updates to the banks’ ombudsman, will stall.
Rachel Reeves avoided a direct tax raid on banks across two consecutive Budgets, resisting pressure from across the Labour benches. Her Financial Services Growth and Competitiveness Strategy, published on 15 July 2025 as part of the Leeds Reforms, set out a ten-year plan to make the UK a global hub for financial services. It included an insurance captives regime and proposals to reform insurance-linked securities.
‘I think these were just political gestures to tidy things up,’ one banking source said, adding they expect no momentum if Miliband takes the post.
On 18 May 2026, HM Treasury published its Ring-Fencing Review policy paper, titled ‘Safeguarding Stability, Enabling Growth,’ with a written statement to the Commons from Economic Secretary Rachel Blake. Industry sources say that reform, alongside ombudsman changes, could be deprioritised under a Miliband Treasury.
The Financial Services and Markets Bill is now in committee stage in the House of Lords. The legislation, trailed in the King’s Speech, covers reforms to the Financial Ombudsman Service and wider regulatory structures. During the Lords committee debate on 8 June 2026, peers attacked the Treasury for ‘eliminating’ oversight of financial watchdogs, a dispute that risks slowing the bill’s progress before Reeves and Starmer leave office.
Cronin summed up the sector’s mood plainly: ‘A period of uncertainty for the banking system lies ahead.’
Miliband has not publicly commented on any Cabinet position. His parliamentary office did not respond to a request for comment.
The pace at which the Financial Services and Markets Bill clears the Lords will be the first concrete test of whether any incoming Chancellor, Miliband or otherwise, intends to defend Reeves’s regulatory programme or discard it.
