Chancellor Rachel Reeves is set to launch a government-backed City "skills compact" that will commit major financial firms to retraining thousands of UK staff for the AI era. The initiative, to be announced on Tuesday during what is likely her final Mansion House speech before Andy Burnham's expected move into No 10, responds to fears that generative AI could trigger mass redundancies across the sector. It matters because financial and related professional services account for roughly 11% of UK economic output and employ around 2.5 million people, making the industry central to the government's growth strategy.

Nearly 20 initial signatories — including Barclays, Lloyds, the London Stock Exchange, Nationwide, Fidelity and Standard Chartered — will draft rolling three-year plans to train and certify staff in up to five critical skills, at least one of which must be AI. Firms will report progress annually to the Treasury and the Financial Services Skills Commission, with a senior executive overseeing each programme and the first data-gathering deadline set for November; all training must occur during working hours and cannot count graduates or apprentices. Clare Tunley, chief executive of the commission, called it the most significant sector-wide skills strategy since the 1960s construction training board, noting the pace of change driven by AI. The backdrop includes a Morgan Stanley estimate that AI could threaten more than 200,000 European banking jobs by 2030 and Standard Chartered's May announcement of 7,000 job cuts.