Reeves to launch City skills compact on AI retraining

Rachel Reeves is due to launch a government-backed financial-services skills compact on Tuesday, in a move aimed at pushing City firms to retrain staff in artificial intelligence and other future-proof skills.

The initiative is being framed as a sector response to the pressure AI is already putting on jobs, productivity and competitiveness in the UK financial industry.

The Guardian first reported on Friday that the chancellor plans to announce the compact at Mansion House, in what is expected to be her final speech there to City leaders. A later Guardian live update repeated the report and said the launch is still expected on Tuesday.

Who is involved

Nearly 20 firms are expected to be among the initial signatories. The names reported so far include Barclays, Lloyds Banking Group, the London Stock Exchange, Nationwide and Fidelity.

Standard Chartered is also among the founding signatories. It has become a touchpoint for the issue after earlier announcing 7,000 job cuts partly tied to AI.

The current group of signatories reportedly covers about 500,000 City workers, giving the compact a potentially wide reach across the financial-services workforce.

What firms will be asked to do

Participating firms will be asked to draw up rolling three-year plans for training and certifying UK staff in up to five critical skills.

AI must be one of those skills.

The companies will also be expected to report progress annually to the Treasury and the Financial Services Skills Commission.

Each participating firm is expected to name at least one senior executive to oversee its internal programme.

Training is expected to take place during working hours, and graduates and apprentices will not count toward the targets.

Why it matters

The Financial Services Skills Commission is spearheading the compact as part of a wider sector-wide skills strategy.

Claire Tunley, the commission's chief executive, said generative AI is changing the pace and scale of skills demand. That makes the compact more than a symbolic pledge: it is being presented as a practical attempt to keep the sector's workforce aligned with a rapidly changing technology landscape.

The policy also fits into broader concerns about how AI will affect back-office work, productivity and staffing levels across finance.

That matters because financial and related professional services remain a major part of the UK economy and a large employer. The government is also seeking to present the City as competitive in a period when firms are reassessing how quickly AI can automate tasks and reshape operations.

What happens next

Reeves is expected to set out the compact formally in her Mansion House speech on Tuesday.

The Treasury has not yet published the full compact text or a complete signatory list, and it remains unclear how many firms will join beyond the initial cohort.

Industry reaction is likely to follow quickly from major employers, unions and trade bodies once the announcement is made.

The wider question is whether the City compact becomes a model for other sector-specific skills deals as AI changes work across the economy.