RACHEL Reeves will promise to usher in a Thatcher-style “Big Bang” in the City this week as she vows to slash regulation on banks.

The Chancellor will try to put some desperately needed boosters under Britain’s stuttering economy by luring big financial firms to Britain.

In her hotly-anticipated Mansion House speech, Ms Reeves will tell banking bosses to forget New York and Paris and bring their staff to London or Leeds instead.

But she is under massive pressure as the economy is shrinking and millionaires are fleeing Britain over sky-high taxes.

A Treasury source said:  “Millions of Brits work in financial services, but for too long red tape and excessive regulation has choked off innovation and growth in the economy. 

“Well, no more. Britain is entering a new era. We will slash regulation and make the UK the best place in the world to do business.

“Forget Paris, New York and Frankfurt – come to London, Leeds and Edinburgh. 

“Rachel is determined to create a new Big Bang which will turbocharge growth in the economy for a new generation to put more pounds in people’s pockets.”

The Big Bang refers to the deregulation of the London Stock Exchange carried out by Margaret Thatcher in the mid 1980s.

It put rocket boosters under the City and established London as a leading financial centre.

Ms Reeves will use her speech to announce moves to slash red tape on banks and financial services companies.

It will be her first big speech since Ms Reeves was caught on camera crying during PMQs.

The Chancellor is facing massive questions about her economic strategy after the economy shrank for the second month on the trot in May.

And the annual Henley Private Wealth Migration Report revealed that 16,500 millionaires are set to leave the UK over the next 12 months – far more than China and Russia put together.

A senior Labour frontbencher told The Sun on Sunday that tax hikes in the autumn Budget “look inevitable”.

They said: “Taxes are going to have to go up. Most of us expect the income tax threshold freeze to be extended.”