UK Regulator Sides with Treasury in Budget Briefing Probe, Keeps Door Open for Further Investigation
The Financial Conduct Authority (FCA), the UK's financial regulator, has declined to immediately investigate Rachel Reeves and the Treasury over pre-budget briefings, leaving open the possibility of further examination. The decision was outlined in a letter addressed to Meg Hillier, chair of the Treasury committee, by Nikhil Rathi, chief executive of the FCA.
The FCA had received requests from politicians, including shadow chancellor Mel Stride, to launch an inquiry into what the Conservatives claimed were market manipulation tactics employed by the Treasury. However, Rathi stated that the regulator had "not commenced an enforcement investigation" and would consider the findings of a Treasury inquiry into pre-budget leaks.
This decision follows controversy over last week's budget announcement, which saw Chancellor Nadhim Zahawi make several surprise changes to his plans, including dropping a plan to raise income tax rates. Allies of the chancellor have suggested that these changes were due to improved forecasts from the Office for Budget Responsibility (OBR), but the OBR later clarified that its forecasts had not changed.
The FCA has indicated that it will review security processes to inform future events and request details from the Treasury on the work being done by permanent secretary James Bowler. The regulator also welcomed a statement from the OBR, which expressed its willingness to cooperate with an investigation into the early release of sensitive information related to the budget.
The decision not to launch an immediate investigation has been met with criticism from Stride, who accused the Treasury of "leaks and spin" that had led to market speculation being "rife" and gilt markets becoming volatile. He also claimed that the chancellor was giving an inaccurate picture of the economic context, suggesting it was driven by political considerations.
However, Rathi emphasized that the FCA's role is not to make judgments on political discourse, but rather to ensure a level playing field and confidence in markets. The regulator has made it clear that its purpose is to hold market participants to account for any breaches of market abuse rules, rather than engaging with the "discourse" surrounding budget announcements.
The controversy surrounding this year's budget highlights ongoing tensions between the UK government and its regulators over issues of transparency and accountability. As one senior official noted earlier this week, the Chancellor's team may have inadvertently caused volatility in markets by leaking sensitive information too early.
The Financial Conduct Authority (FCA), the UK's financial regulator, has declined to immediately investigate Rachel Reeves and the Treasury over pre-budget briefings, leaving open the possibility of further examination. The decision was outlined in a letter addressed to Meg Hillier, chair of the Treasury committee, by Nikhil Rathi, chief executive of the FCA.
The FCA had received requests from politicians, including shadow chancellor Mel Stride, to launch an inquiry into what the Conservatives claimed were market manipulation tactics employed by the Treasury. However, Rathi stated that the regulator had "not commenced an enforcement investigation" and would consider the findings of a Treasury inquiry into pre-budget leaks.
This decision follows controversy over last week's budget announcement, which saw Chancellor Nadhim Zahawi make several surprise changes to his plans, including dropping a plan to raise income tax rates. Allies of the chancellor have suggested that these changes were due to improved forecasts from the Office for Budget Responsibility (OBR), but the OBR later clarified that its forecasts had not changed.
The FCA has indicated that it will review security processes to inform future events and request details from the Treasury on the work being done by permanent secretary James Bowler. The regulator also welcomed a statement from the OBR, which expressed its willingness to cooperate with an investigation into the early release of sensitive information related to the budget.
The decision not to launch an immediate investigation has been met with criticism from Stride, who accused the Treasury of "leaks and spin" that had led to market speculation being "rife" and gilt markets becoming volatile. He also claimed that the chancellor was giving an inaccurate picture of the economic context, suggesting it was driven by political considerations.
However, Rathi emphasized that the FCA's role is not to make judgments on political discourse, but rather to ensure a level playing field and confidence in markets. The regulator has made it clear that its purpose is to hold market participants to account for any breaches of market abuse rules, rather than engaging with the "discourse" surrounding budget announcements.
The controversy surrounding this year's budget highlights ongoing tensions between the UK government and its regulators over issues of transparency and accountability. As one senior official noted earlier this week, the Chancellor's team may have inadvertently caused volatility in markets by leaking sensitive information too early.
I'm low-key surprised the FCA didn't go full steam on the Treasury about those pre-budget briefings... like, come on, those were some major changes 
and they just kinda... happened out of nowhere? It's not exactly reassuring to think that there might have been some backroom deals at play. The fact that the OBR clarified its forecasts later on makes it sound even more sketchy 
. I mean, come on, a "leak" or some pre-budget briefing and suddenly the whole market is going haywire? It's like they're trying to create some drama for themselves. And now the FCA is just like "oh well, we won't investigate, but we'll review our security processes"... give me a break 
. This whole thing reeks of insider trading or something fishy going on, but I guess nobody wants to rock the boat 
. It's always about keeping things calm and smooth for the powers that be, even if it means letting some shady stuff slide 
. and what's with all the "level playing field" nonsense? markets can't be trusted when politicians are practically giving away info on live TV 
. it's all just a big show, if you ask me 
.
so like what's up with this whole pre-budget briefings thing tho? 
i was supposed to get my GCSEs results last week and they just kept getting pushed back 
it was like that too with the budget announcement, chancellor makes some big changes and then suddenly they're all "oh wait, we didn't actually change anything" 
anyway back to this UK thing... so apparently the regulator is all "hey, let's review our security processes" but i'm still not sure why they're not investigating 
. and yeah, the FCA is right to keep an open mind about investigating this further... it's all about keeping things transparent and fair 
. but at the same time, we should be holding our politicians accountable for their actions 
. maybe next time they'll think twice before spilling the beans 
. And what's with the Treasury trying to spin this as if it's all just a big misunderstanding? Come on, Nadhim, we all know how budgets work: you cook up some numbers and then try to sell them to the public 
UK regulators are always so slow to act... they're basically letting politicians get away with market manipulation 
I mean, what's next? They'll just keep on leaking that info and hoping the FCA doesn't catch on... it's not like this is some kind of game where people just throw out bad news to stir up panic. 
. It's like the FCA doesn't care about transparency or accountability anymore... I'm starting to think we're just living in some kind of financial fantasy world 
. I mean, come on, Nikhil Rathi, you can't just let the Chancellor's team run wild with pre-budget briefings and expect everything to be cool 
. Stride is right though, it does seem like there was a lot of spinning going on here. And btw, who needs a referee when you have an OBR that just clarifies things an hour later?