Reeves to launch City ‘skills compact’ for the AI era

TL;DR:

• Chancellor Rachel Reeves will announce a financial services “skills compact” committing City firms to retrain UK staff for AI.
• Seventeen founding signatories — including Lloyds, the London Stock Exchange and Lloyd’s of London — cover about 500,000 workers and must file rolling three-year training plans.
• The move follows warnings that AI could put more than 200,000 European banking jobs at risk by 2030.

Rachel Reeves will use what is likely her final Mansion House speech to launch a City “skills compact”, a government-backed pledge committing major financial firms to retraining thousands of UK workers as AI reshapes the sector. Firms will draw up rolling three-year plans covering up to five critical skills — with AI mandatory — and report progress to the Treasury each year.

A sector bracing for disruption

Nearly 20 founding signatories, among them Nationwide, Fidelity, Standard Chartered and Zopa, cover roughly half a million staff; only UK-based workers are included. Claire Tunley, chief executive of the Financial Services Skills Commission, called it the most significant sector-wide skills strategy since the construction industry’s training board of the 1960s: “I don’t think we’ve seen the likes of this in a generation.” All training must happen in working hours, and graduates and apprentices cannot be counted towards targets.

The backdrop is anxiety over jobs. Morgan Stanley last year estimated AI could threaten more than 200,000 European banking roles by 2030, and Standard Chartered — a signatory — announced 7,000 cuts in May, its boss later apologising for calling the move “replacing, in some cases, lower-value human capital”. The strain is sharpest at entry level: PwC’s 2026 AI Jobs Barometer found AI-specialist hiring grew eight times faster than overall hiring last year, while London-market early-careers recruitment fell 25% in 2025, with a further 25% drop forecast. Insurer Allianz Partners confirmed plans to cut up to 1,800 largely phone-based claims roles.

Looking forward

The first reporting deadline falls in November, giving the Treasury its first systematic read on how fast the City is closing its AI skills gap. It dovetails with the FCA’s landmark review of AI in financial services and the Bank of England’s warning that AI poses a stability risk. Whether voluntary retraining can offset displacement — rather than simply document it — will be the real test, with under-30 representation in the London market forecast to fall from 24% to just 7% by 2030.