Rachel Reeves will not be investigated over pre-budget briefing, FCA says | Financial Conduct Authority

Britain’s financial regulator decided not to immediately investigate Rachel Reeves and the Treasury over pre-budget briefings but left the door open for further scrutiny of what the Conservatives claimed amounted to market manipulation.

In a letter addressed to the chair of the Treasury committee, Meg Hillier, chair of the Financial Conduct Authority (FCA), said the regulator had turned down requests from politicians, including shadow chancellor Mel Stride, to launch an investigation into briefings made by the chancellor before last week’s announcement.

Nikhil Rathi said the FCA had “not launched an enforcement investigation” into potential market abuse, but added that the regulator would consider the findings of the Treasury investigation into pre-budget leaks.

“We have requested details of this study and asked that the results, including any investigation into any leaks of market-sensitive or insider information relating to the budget, be shared with us so that we can consider it as appropriate,” the FCA said.

Before this year’s budget, there were plenty of stories about what was being considered; These included the revelation in the Financial Times a few days ago that Reeves had abruptly abandoned plans to raise income tax rates.

Reeves’ allies said the U-turn came because of improved forecasts from the Office for Budget Responsibility, but the OBR later revealed it had not updated its forecasts for two weeks.

Confusion around Reeves’ decisions, and conflicting explanations for why they were taken, has led to accusations that Treasury officials deliberately misled journalists in a bid to keep Britain’s borrowing costs low.

Stride said this week that Treasury’s “leaks and diversions” had led to market speculation being “rampant and destabilizing of gilded markets”.

In his letter to the FCA, he added: “It is increasingly clear that the Chancellor has presented an inaccurate picture of the economic and financial context, and this appears to be driven by political considerations.”

However, Rathi said in his letter that the main purpose of the regulator’s market abuse rules is to ensure a level playing field and confidence in the markets. “It is not his intention to pass judgment on political discourse, although that discourse does occasionally have an impact on markets,” he said.

“How the government explains its position to the public ahead of a financial or similar event is a matter for parliament, through accountability mechanisms.”

Debates over the budget have also ensnared the OBR. Governor Richard Hughes resigned on Monday after the Treasury watchdog accidentally released a key document before the chancellor made his speech.

After blasting an internal investigation that revealed it was not the first time the OBR had mistakenly released budget documents early, Hughes said he took “full responsibility” for failing to handle sensitive information.

Although no action was taken due to the breach, it was revealed that its reports were also accessed in early March 2025, before the spring announcement.

In his letter, Rathi said the FCA was considering the OBR’s report on the early publication of the Economic and Fiscal Outlook. He added that the regulator welcomed the OBR’s statement that it would “co-operate fully with the FCA”.