Welcome to The Fiscal Dispatch, Atticus Partners’ financial services newsletter. Once a month, we cover topical stories relating to financial services (FS) in Westminster and Whitehall.
In this edition, we explore significant investment in Belfast from American banks, new policy from the Prudential Regulation Authority, the Treasury Committee’s inquiry into AI and financial services, UK inflation, and Cleo’s decision to bypass the London Stock Exchange.
Atticus Partners is hosting a FinTech-focused roundtable on the morning of October 28th with Samantha Niblett, Labour MP, Founder of Labour: Women in Tech, and Co-Chair of the Financial Technology APPG. If you would like to attend, please send a short email to fs@atticuscomms.com with your name, job title, and place of work. Spaces remain subject to availability.
American finance giants back the UK
Belfast is set to solidify its status as a hotspot for international finance, as several major US firms announce a wave of investment into the city’s financial services sector. Bank of America will create up to 1,000 new jobs in Belfast, marking its first operation in Northern Ireland. The bank’s new facility is expected to position the city as a “centre of excellence” for financial technology and security operations, according to the UK’s Department for Business and Trade.
Citigroup has also pledged an additional £1.1 billion across its UK sites, with a continued expansion in Belfast, where it already employs over 4,000 people. Other firms, including PayPal and S&P Global, are part of the £1.25 billion investment package, announced ahead of President Donald Trump’s recent state visit to the UK. Official figures from both Westminster and Stormont hailed the move as a vote of confidence in the region’s talent pool and economic potential.
This investment represents far more than job creation. Strategically, it signals Northern Ireland’s growing role in global finance and highlights how political agreements, such as the early-stage US-UK trade talks, can encourage corporate certainty. For Westminster, this is a chance to reinforce one of the only claims that holds true post-Brexit: that the country remains a premier destination for high-value, high-skill investment. The Chancellor and Business Secretary have already framed the announcements as proof of the UK’s “immense potential” and its strong financial partnership with the United States.
For Northern Ireland specifically, the opportunity could be transformative. The influx of jobs, especially in cyber and financial services, can help reshape Belfast’s economy and attract further international players. It also provides a platform for skills development, with initiatives like Bank of America’s digital training programme supporting inclusion and long-term workforce readiness. If managed well, this moment could mark the beginning of Belfast’s emergence as not just a regional hub, but a recognised global player in the financial services industry.
The Prudential Regulation Authority’s proposals signal a potential post-Brexit shift
The Prudential Regulation Authority (PRA) has announced plans to reduce regulatory requirements for banks through its proposal to remove 37 individual reporting templates.
These represent an initial set of targets that were inherited from previous European Union regulations and may be one of the clearest signals yet of the UK reshaping its financial rulebook in a post-Brexit world.
The PRA has decided that these templates cover data which are either no longer necessary to support its work or are already available from other resources and elsewhere. In addition, many of the templates being removed relate to financial reporting which industry had identified as a particularly complex area that often had lots of overlap.
They also highlighted these proposals build on previous streamlining measures it has already made to reporting for insurers, which it claims has reduced insurance reporting by one third. The regulator will hope these changes will deliver similar benefits to banks and reduce administrative costs.
The consultation is set to last for a month, and the PRA has a goal of implementing the changes from 1st January 2026 onwards which is estimated to save the industry £26 million per year.This forms part of an initial phase of the PRA’s Future Banking Data initiative and wider efforts to reduce burdens on firms whilst maintain the requirements and data need to accurately inform the PRA’s work.
Of course, while the balance is delicate, to many this is a welcome move for many and one that delivers benefits by addressing relatively “low hanging fruit” whilst also ensuring that critical supervisory insight will not be lost.
For a banking sector facing its own challenges against a backdrop of broader economic uncertainty and difficulties ahead of November’s Budget, streamlining these overheads could offer banks some timely relief.
Treasury Committee puts AI in the Spotlight
Earlier this year the House of Commons Treasury Committee opened an inquiry into the increased use of Artificial Intelligence (AI) in banking, pensions and other financial services, including delivering a consultation on the matter. Following the closure of the consultation in April, the Treasury Committee is now going directly to the source and asking leading AI providers about their strategy and systems used in the financial sector.
In her correspondence to Amazon Web Services (AWS), Google Cloud, Anthropic, Meta, Microsoft, and OpenAI, Chair of the Committee Dame Meg Hillier questioned what safeguards the AI giants have in place to protect against the misuse of AI in financial services, in addition to asking how they work in tandem with the Bank of England (BoE) and the Financial Conduct Authority (FCA).
Research indicates that use of AI in the sector is only continuing to grow, with 75% of firms already using the technology and a further 10% expected to use it over the next three years. This is an area of growth not even the regulators are immune from, with BoE Governor Andrew Bailey, recently stating that he and other regulators should be using AI to help them spot problems with the firms they regulate.
It appears the Treasury Committee is taking a progressive approach to the technology, including considering how the ongoing House of Lords Artificial Intelligence (Regulation) Bill will impact AI providers in the financial services sector. As such, if legislators, regulators and tech providers continue to work in partnership to develop guidelines and structure for use of AI in financial services, there is the potential to witness the fastest pace of growth across the sector in recent years.
UK inflation keeps Bank cautious as rates held
“We’re not out of the woods yet,” Bank of England Governor Andrew Bailey cautioned as the central bank held interest rates at 4%, signalling that inflationary pressures remain a concern. Analysts had not expected a cut, with consumer prices running nearly twice the Bank’s 2% target.
Alongside the decision, the Bank revealed it would slow the pace of reducing its government bond holdings, cutting back from £100bn to £70bn annually. The move follows years of “quantitative tightening” aimed at unwinding the debt accumulated during crises such as the global financial crash and the Covid pandemic, while avoiding turbulence in the gilt market.
Inflation has been rising again since April, driven largely by food costs and labour pressures in the service sector. Overall price growth remains elevated at 3.8%, with fresh figures showing food and drink prices climbing 5.1% year-on-year. Consumer demand continues to be patchy, concentrated around occasional events rather than steady spending across sectors.
Looking ahead, the Bank signalled that future rate cuts would be gradual and dependent on clear evidence of easing price pressures, while the upcoming autumn Budget adds an additional layer of uncertainty for firms and markets alike.
Cleo’s $1bn float plans bypass London amid listing woes
London-based fintech Cleo, now valued at over $1bn, is preparing to float in the US rather than on the London Stock Exchange. Despite being headquartered in the capital, the company earns all of its revenue in the US, with UK expansion only planned for next year.
The decision highlights the challenges facing London’s markets, which have seen just 12 IPOs this year, raising £199m – the weakest performance since at least 2000. Cleo joins other high-profile FinTechs, including Revolut and Monzo, in considering US listings as the London market struggles to attract fast-growing tech firms.
Government reforms, including changes to listing rules and efforts to encourage pension fund investment, have so far failed to sway Cleo. Analysts note that structural hurdles, such as stamp duty on share trades and limited policy ambition, continue to push innovative companies abroad.
Some optimism remains, with firms such as Beauty Tech, Shawbrook Bank and Ebury preparing London IPOs, and Visma and SumUp exploring the market for 2025. While Cleo has not completely ruled out a London listing, meaningful policy changes – from stamp duty relief to targeted pension fund mandates – would be needed to retain high-growth companies.