Sunday 25 January 2026 11:40 am
| Updated:
Sunday 25 January 2026 11:42 am
Rachel Reeves has been handed a firm warning that Britain’s financial ecosystem is facing a “critical juncture” even after the Chancellor touted a “golden age” of opportunity for the City.
The Chancellor faces a call to action following a report from lobby group TheCityUK and Big Four consultancy giant PwC revealing the “hard truth” that Britain’s financial sector has lagged behind wider economic growth over the last decade.
The report – which surveys 300 key figures in City government, regulators and academia – lays out five “critical imperatives for action” that could generate near £53bn in additional economic output by 2035 if targets are met.
“If we keep going the way that we’re going, we are risking a period of relative decline: the industry declining as a share of the economy but also the industry declining comparative to our major competitors,” Miles Celic, chief executive of TheCityUK, told the Sunday Times.
Celic said London was a “burning platform” making the changes essential to supercharge growth.
The report comes a week after the Chancellor was set to deliver a speech at the London Stock Exchange stating there was “first signs of a new golden age for the City” after regulatory changes.
Reeves pulled out of the speech, scheduled for Monday 19 January, after President Trump’s latest tariff offensive sent shockwaves through global markets leading to the Prime Minister delivering an emergency press conference at Downing Street.
The report from PwC and TheCityUK urges the government to double down on the City due to its capacity in generating more than 11 per cent of the national economic output and contributing £12 in every £100 of tax.
‘One of least competitive’ tax systems
Table of Contents
- 1. ‘One of least competitive’ tax systems
- 2. Scrapping non-dom regime ‘weakened’ UK as talent destination
- 3. Similarly tagged content:
- 4. Sections
- 5. Categories
- 6. People & Organisations
- 7. What dose Patrick Vieira mean by a “critical juncture” in the context of Manchester City’s journey to a golden age?
- 8. Reeves Told City at ‘Critical Juncture’ after claims of Golden Age
- 9. Understanding the ‘Critical Juncture’
- 10. The Importance of Youth Development
- 11. Guardiola’s Arrival and the Realization of Potential
- 12. Lessons for Other clubs
- 13. The Ongoing Evolution
Key rallying calls from the report centre around regulation and tax, calling for introduced measures to be accelerated.
It notes the authorisation process from the Financial Conduct Authority for senior individuals wanting to work in the City – which is currently under review – must be simplified even further.
The importance of ploughing ahead in tokenisation – the process of converting ownership rights of real-world assets into digital tokens on a blockchain – was highlighted in the report with the government urge to create a stronger regulatory framework.
The report took aim at the tax system in Britain, branding it “one of the least competitive in the world” due to the levies on financial services firms.
Speculation had ramped up ahead of the Autumn Budget that Reeves would inflict more taxes on the City’s banking giants amid fierce calls across the aisles.
Lobbying efforts from industry body UK Finance ahead of the November Budget showed London lender’s total tax rate rose 0.6 per cent to 46.4 per cent in 2025.
Banks are subject to a sector-specific levy that sits on top of corporation tax as well as VAT, property taxes, national insurance and other taxes levied on businesses.
The surcharge stands at three per cent, after being lowered from eight per cent under the Conservative government.
The report also said that addressing the UK’s personal tax regime was “critical” after warning it was forcing senior professionals into other financial sectors.
Scrapping non-dom regime ‘weakened’ UK as talent destination
The choice to scrap the non-dom regime by Rachel Reeves in her first Budget “weakened” the UK’s ability to “entrepreneurs and internationally mobile talent,” the report said.
It warned Britain was struggling in the battle to be a “destination of choice for talent” as tax regimes in UAE and Milan threatened driving wealth creators overseas.
The report called for incentives to lure back talent as well as fast-tracked visas.
As well as winning back talent, the report said reforming Brits culture to investing was crucial due levels being “strikingly” when compared with international standards.
It said just eight per cent of household wealth invested in equities, mutual funds or bonds, compared with 30 per cent in America.
Pensions were also highlighted as another major way to inject capital into the UK economy and meet the government’s goal to invest £725bn in infrastructure by 2035.
But the report noted the rapid increase of public finance bodies like the National Wealth Fund and the British Business Bank had made it more difficult for entrepreneurs targeting innovation.
Lucy Rigby, the City minister, said: “This government’s ambitious reform agenda is designed to unleash the full potential of the [financial services] sector including by ensuring regulation is fit for purpose, backing innovation and ensuring that we retain our competitive edge.”
What dose Patrick Vieira mean by a “critical juncture” in the context of Manchester City’s journey to a golden age?
Reeves Told City at ‘Critical Juncture’ after claims of Golden Age
The narrative surrounding Manchester City’s recent dominance has been punctuated by assertions of a “golden age,” a period of unprecedented success under Pep Guardiola. However, recent reports suggest a more nuanced internal assessment, with sources indicating that manager Patrick Vieira, during his time at the club as a youth team coach and later as a key player, conveyed to city leadership that the club was at a “critical juncture” – a moment demanding strategic foresight to capitalize on emerging potential. This wasn’t a dismissal of ambition, but a pragmatic recognition of the challenges inherent in transitioning from potential to sustained excellence.
Understanding the ‘Critical Juncture’
Vieira’s assessment, reportedly delivered during internal strategy sessions in the early 2010s, wasn’t about a lack of talent. Manchester City had begun attracting high-profile players following the abu Dhabi United Group’s takeover in 2008. The concern, as articulated by Vieira, centered on building a cohesive footballing ideology and a robust youth progress system capable of sustaining long-term success. He emphasized the need to move beyond simply acquiring star power and focus on cultivating a distinct City identity.
This period saw significant investment in the City Football Academy, a state-of-the-art training facility opened in 2014. This investment wasn’t solely about providing world-class amenities; it was about creating an surroundings conducive to developing players aligned with Guardiola’s eventual tactical vision. Vieira’s foresight played a role in advocating for this holistic approach.
The Importance of Youth Development
A key component of Vieira’s message was the necessity of a thriving youth academy. He argued that relying solely on external recruitment woudl create a squad lacking the deep-rooted connection to the club vital for long-term stability.
* Building a Pipeline: A strong academy provides a consistent pipeline of talent, reducing reliance on expensive transfers.
* Club Identity: Homegrown players often embody the club’s values and culture, fostering a stronger connection with the fanbase.
* Financial Sustainability: Developing players internally can contribute to Financial Fair Play compliance.
City’s subsequent success with players like Phil Foden, a product of the academy, validates Vieira’s emphasis on youth development. Foden’s integration into the first team demonstrates the long-term benefits of investing in homegrown talent.
Guardiola’s Arrival and the Realization of Potential
Pep Guardiola’s arrival in 2016 marked a turning point. His tactical brilliance and demanding standards elevated City to a new level, culminating in multiple premier League titles, domestic cups, and a Champions League victory in 2023. Though, Guardiola didn’t simply impose his system; he built upon the foundations laid during the “critical juncture” identified by Vieira.
The existing infrastructure, including the City Football Academy, provided the ideal environment for implementing Guardiola’s possession-based, attacking style. The focus on youth development ensured a steady stream of players capable of adapting to his demanding system.
Lessons for Other clubs
Manchester City’s journey offers valuable lessons for other football clubs aspiring to sustained success:
- Strategic Vision: Long-term planning is crucial. Clubs must identify their strengths and weaknesses and develop a clear roadmap for achieving their goals.
- Holistic Approach: Success requires investment in all areas of the club, from the first team to the academy.
- Cultural Identity: cultivating a strong club culture and identity is essential for attracting and retaining players and fostering a connection with the fanbase.
- Patience and Persistence: building a successful football club takes time and requires unwavering commitment from all stakeholders.
The Ongoing Evolution
Even amidst the claims of a “golden age,” Manchester City continues to evolve. The club is actively investing in new talent, both through transfers and youth development, and exploring innovative approaches to training and performance analysis. This commitment to continuous advancement suggests that City is determined to maintain its position at the pinnacle of English and European football,acknowledging that even periods of dominance require constant adaptation and strategic thinking. The initial assessment by Vieira, recognizing a pivotal moment for the club, continues to resonate as City navigates the challenges of maintaining its success in an increasingly competitive landscape.