Rachel Reeves has been warned against deregulating the City as she gears up to announce the "biggest financial regulation reforms" in a decade.
It comes as the Chancellor is set to make her annual Mansion House speech to financial bosses, where she is expected to announce a wave of policies to cut red tape.
Reeves is expected to launch a series of "Leeds Reforms" aimed at the financial sector, focusing on a strategy of less onerous rules for firms rather than reduced risk.
She will also reduce restrictions on lenders to allow some banks and building societies to offer more high loan-to-income mortgages to help more people buy a first home.
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|Rachel Reeves is expected to make the announcement
The Chancellor is expected to say the reforms would have "a ripple effect that will drive investment in all sectors of our economy and put pounds in the pockets of working people."
However, economists and campaigners have issued a warning that deregulating the City has echoes of the deep recession that followed the financial crash in 2008.
Head of economy and environment at the New Economics Foundation thinktank Chaitanya Kumar told The Guardian: "It feels like groundhog day.
"We’ve been here before, expecting the financial sector to do most of the heavy lifting in terms of growth."
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|Chancellor of the Exchequer Rachel Reeves during a roundtable discussion with top finance executives at the Lloyds Banking Group's offices, in Leeds
Kumar continued: "The 2008 crash and what followed should have been a very strong lesson to everybody in not completely letting the financial services sector off its leash: but that’s what we seem to be doing.
"I just haven’t seen any evidence that deregulating the financial services sector is going to create significant growth."
Meanwhie, a minister suggested taxes will not be raised in the autumn budget for people earning an average salary.
Roads minister Lilian Greenwood was asked to clarify what Transport Secretary Heidi Alexander meant when she said over the weekend that the Government had committed not to hike taxes on those with “modest incomes”.
Asked what "modest" meant "in salary terms," Greenwood told Sky News: "I think it means people who earn kind of around average income.”
She added: "I can’t tell you exactly what the Transport Secretary had in her mind when she said that, but our promise when we came in was that we wouldn’t hit working people with increases in employee national insurance, in income tax or VAT, and we’ve absolutely stuck to those promises."
Asked whether there was a wealth tax coming, Greenwood said: "Well these are decisions for the Chancellor, but clearly we’ve always said that we think those who’ve got the broadest shoulders should bear the greatest burden."