Growth is now an explicit political input into FCA supervision, and the regulator says harder calls are coming
Chancellor Reeves's November 2024 remit letter sets the FCA's direction for this Parliament. The FCA's July 2026 response maps it to strategy and flags that harm trade-offs will become more explicit.
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Worth reviewing. All regulated firms should understand what this signals about supervisory priorities and upcoming consultations. No immediate action is required.
Under a statutory requirement to write at least once per Parliament, Chancellor Rachel Reeves set out the Government's priorities for the FCA in the November 2024 remit letter, addressed to FCA Chief Executive Nikhil Rathi, with growth and international competitiveness front and centre.
The FCA's 2026 response is largely a tidying exercise, mapping the Chancellor's four recommendations to the FCA's 2025-2030 Strategy. The substance is in what the regulator says about the limits of the exercise. The four strategic priorities are: being a smarter regulator, supporting growth, helping consumers, and fighting crime. The four government recommendations cover sustainable lending, investment and trade; competition, innovation, start-up and scale-up; global finance hub and international regulatory leadership; and sustainable finance and green transition.
The most important passage in the response is also the plainest. The FCA states that trade-offs inherent in pursuing growth will become more explicit, with a corresponding acceptance that not all harm can be prevented. It adds that these are not decisions for the regulator alone, and that the Government should be clear about how it wishes growth to be balanced against the overall risk appetite for the regulatory system. The FCA is, in effect, asking the Government to own the harder calls.
On proportionality, the FCA cites Senior Managers and Certification Regime (SM&CR) streamlining and redress reform as ways to reduce administrative burden and compliance costs while maintaining consumer protection standards. These are the two areas most likely to produce consultations that compliance leads will need to read closely. No timing has been confirmed in the available material, but both are flagged as active workstreams.
On the international and data agendas, the signals are more directional. The Berne Financial Services Agreement came into effect on 1 January 2026 to ease cross-border trade for UK and Swiss firms serving wholesale and sophisticated clients, with the FCA and PRA publishing joint guidance in November 2025. An Open Finance roadmap followed in April 2026, alongside a Smart Data Accelerator examining mortgages and SME finance. These are context rather than near-term action items for most firms.
Watch for consultations on SM&CR simplification and redress reform. Those are where the political pressure from the remit letter is most likely to land in practice.
