UK Voting in Next General Election Age Lowered to 16, Mortgage Eased for First-Time Buyers — Labour Market Woes May Slow Rate Cuts
- TBA
- Jul 21
- 5 min read
Rachel Reeves has announced the ‘biggest financial regulation reforms in a decade
Last week, UK Chancellor Rachel Reeves announced what she called the "biggest financial regulatory reform in a decade." The move aims to invigorate financial markets by cutting regulatory “red tape,” with the broader goal of stimulating overall economic growth.
According to the Treasury's plan, the so-called "Leeds Reforms" include:
Reducing cumbersome regulatory provisions
Promoting financial innovation
Loosening mortgage restrictions (allowing borrowing of more than 4.5 times annual income)
Streamlining accountability rules for senior banking executives
Reviewing the post-2008 “ring-fencing” rules separating retail and investment banking
Launching a stock market investment campaign funded by the financial industry
One of the changes attracting the most public attention is the lowering of the mortgage threshold for first-time homebuyers.
For example, Nationwide Building Society has lowered the income requirement for its 95% mortgage scheme from £35,000 to £30,000 for individual applicants, and from £55,000 to £50,000 for joint applicants. The Bank of England estimates that around 36,000 people per year could benefit from this change and realize their dream of homeownership.
However, the policy has sparked polarized reactions. Supporters argue that it helps more people get on the property ladder and own a home. Critics worry it may encourage unaffordable debt levels, increasing the risk of home repossessions. The Daily Telegraph even featured these concerns on its front page, questioning whether such “high-risk loans” might destabilize the financial system.
Beyond support for homebuyers, Reeves also plans to establish an "Investor Concierge Service" — assigning dedicated government contacts to major foreign investors.
Reeves has made it clear that she wants to attract more private investment into the UK by relaxing regulation, in part to ease fiscal pressures. After years of excessive borrowing, the UK’s sovereign debt market is already under strain.
Notably, Reeves has repeatedly described the reforms as having a "ripple effect" on the wider economy — a phrase that has drawn concern from some left-leaning think tanks, who worry this is simply a rebranded version of “trickle-down economics” — giving advantages to the wealthy and corporations, in the hope that prosperity will eventually reach ordinary people.
While some aspects of the reform package may be seen as reasonable adjustments, deeper concerns remain. Analysts argue that the UK's overreliance on the financial sector — coupled with chronic underinvestment in infrastructure and manufacturing — is the true root of its sluggish economic growth.
As a result, most industry observers view these reforms as a bold gamble by Reeves, made under pressure from fiscal constraints, weak investment, and high public expectations. She is betting on the financial sector to jumpstart growth, while also signaling an open invitation to global capital. But history has shown: financial liberalization does not come without cost.
16 and 17-year-olds will be able to vote in next general election
The UK government has announced that it will lower the voting age to 16, granting approximately 9.5 million people the right to vote for the first time — marking the most significant electoral reform since 1969.
This decision means that in future UK general elections, all 16- and 17-year-olds will have the right to vote — no longer limited to local elections in Scotland and Wales. The move not only fulfills a key Labour Party manifesto pledge from last year, but also signals a major structural shift in the UK’s democratic system.
According to the UK government’s statement, the key points of the reform include:
Granting full voting rights to 16- and 17-year-olds for all levels of elections (local, regional, and national)
Expanding the total number of registered voters to potentially over 58 million (up from 48.2 million currently)
Among the newly eligible voters, around 9.5 million had previously been excluded from voting
Scotland and Wales had already allowed voting from age 16 in local parliamentary elections
Deputy Prime Minister Angela Rayner said: “For too long, public trust in democracy has been in decline. We must tear down barriers to participation and give more people the opportunity to have a say in how our country is run. This is a key part of our Plan for Change and fulfills our promise to extend voting rights to 16-year-olds.”
In addition, to further boost electoral participation, the Labour government also announced that UK bank cards will now be accepted as valid voter ID, a move that has sparked security concerns.
Other accepted forms of ID will now include digital versions of documents such as veterans' cards and driving licenses. The government will also roll out a digital Voter Authority Certificate, allowing voters to verify their identity electronically.
UK unemployment rises and wage growth slows as jobs market ‘weakens’
According to the latest data released by the UK Office for National Statistics (ONS), the unemployment rate rose to 4.7% in the three months to May, reaching its highest level since June 2021. At the same time, average wage growth slowed from 5.3% to 5%, further confirming signs of weakness in the UK labour market.
The increase in unemployment exceeded market expectations (which had forecast 4.6%) and has intensified pressure on the Bank of England ahead of its upcoming interest rate decision on August 7. Although inflation rose to 3.6% in June, well above the Bank’s 2% target, the economy has contracted for two consecutive months — with GDP falling 0.1% in May and 0.3% in April — making an interest rate cut widely anticipated by markets.
The data also showed a sharp slowdown in private sector wage growth, falling from 4.3% in April to 3.7% in May. Meanwhile, UK job vacancies declined for the 36th consecutive month, dropping to 727,000 in June, indicating weak employer confidence and sluggish labour demand.
For Chancellor Rachel Reeves, the combination of economic slowdown and rising unemployment presents a dual challenge. With widespread expectations of tax increases in the autumn budget, the weakening economic outlook further narrows her room for policy maneuver.
The Federation of Small Businesses (FSB) partly blamed government policy for the economic strain. Its policy chair Tina McKenzie stated: “Increasing employment taxes, introducing 28 new labour regulations, and planning to raise employer pension contributions — this is not the right path to promote jobs and growth.”
While most economists believe an August rate cut is almost certain, opinions diverge on the path beyond that. The National Institute of Economic and Social Research (NIESR) warned that inflation remains high, and the Bank of England may need to wait until next year for further cuts.
Paul Dales, Chief UK Economist at Capital Economics, observed that businesses are trying to offset rising pension and minimum wage costs by raising prices, but a more common response has been layoffs, which could suppress inflation over the medium term. He predicted: “The Bank of England will gradually lower interest rates from the current 4.25% to around 3%.”
Additionally, a June labour market report jointly released by the Recruitment and Employment Confederation and KPMG found that the number of job seekers is increasing at the fastest rate since November 2020, signaling the sharpest decline in employment confidence since the pandemic began.
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