Rachel Reeves has claimed that rules and red tape are acting as a “boot on the neck” of businesses and risk “choking off” innovation across the UK without bold reforms.

In a speech to City bosses attending the Mansion House dinner at London’s Guildhall on Tuesday evening, the chancellor heaped further pressure on regulators to allow for more risk in order to boost economic growth.

“It is clear that we must do more,” Reeves said. “In too many areas, regulation still acts as a boot on the neck of businesses, choking off the enterprise and innovation that is the lifeblood of growth.

“Regulators in other sectors must take up the call I make this evening, not to bend to the temptation of excessive caution, but to boldly regulate for growth in the service of prosperity across our country.”

The comments follow the launch of her financial services strategy, dubbed the Leeds Reforms, which were published during a summit with banking bosses and the heads of City regulators in West Yorkshire on Tuesday morning.

Reeves plans to water down a series of regulations introduced following the 2008 financial crisis, after strong lobbying by City firms, and push for more risk-taking by both businesses and consumers.

However, she argued that the government is “regulating for growth”, and that weaker regulations will ultimately have trickle-down benefits for consumers.

“We have been bold in regulating for growth in financial services and I have been clear on the benefits that that will drive: with a ripple effect across all sectors of our economy putting pounds in the pockets of working people; through better deals on their mortgages; better returns on their savings; more jobs paying good wages across our country.”

Among the plans put forward in the Leeds Reforms are proposals to “radically streamline” accountability rules for senior bankers, and review ringfencing rules – introduced after the 2008 financial crisis – that are meant to protect consumer cash from a bank’s riskier business activities in the coming months.

Meanwhile, lenders will be allowed to offer riskier mortgages that are worth more than 4.5 times a borrowers’ annual income, in an effort to get more first time buyers with lower salaries on the housing ladder. That is alongside a permanent government-backed mortgage guarantee scheme, in which taxpayers will pick up the bill when a borrower defaults, in an effort to encourage select banks to offer more 91-95% mortgages.

There will also be a review of risk warnings attached to investment products to ensure that people are “accurately” judging risk levels. That is alongside plans to let banks send information about “investment opportunities” to savers who have cash sitting in low interest rate accounts, encouraging them to shift money to stocks and shares.

The chancellor gave the greenlight on Tuesday to a new industry-funded advertising campaign to encourage consumers to invest their cash savings in stocks. The campaign is likely to be modelled on the “Tell Sid” advertising blitz which prompted the public to buy up shares in the newly privatised British Gas in 1986.

However, efforts to encourage more risk taking came as the Treasury reigned in the powers of the Financial Ombudsman Service (FOS), which settles complaints between consumers and businesses. Consumers will now have a 10-year limit on making claims, and from will see the rate of interest applied to compensation slashed from 8% from January.

It comes amid growing anger from banks and specialist lenders that the FOS has been operating as a “quasi-regulator” and failed to stem the flow of car finance commission claims that have since ballooned into a wider scandal.

Sara Hall, co-executive director at Positive Money, said: “It remains unclear how growing the financial sector will deliver the government’s goals of building a clean energy superpower or revitalising British industry – and even less clear how City deregulation will raise living standards for working people.

“The experience of recent years, as well as a wealth of academic evidence, shows that expecting growth to ‘trickle down’ from the financial sector simply does not work.”

Reeves’s push to ease regulation comes against a backdrop of disappointing UK growth after official figures last week showed the economy unexpectedly shrank in May by 0.1%, adding to speculation that she will be forced to raise taxes again in the autumn budget.

At a session of the Commons business and trade committee with regulators on Tuesday, its chair Liam Byrne – a former chief secretary to the Treasury – said evidence suggests liberalisation of regulation is “often accompanied by lending booms that end badly”.

Reeves will need to balance already tight public finances, that were made even harder after the government’s u-turn on welfare cuts following pressure by Labour MPs, which have obliterated the planned-for £5bn savings a year. She appeared in tears in the Commons a day later, which she later said were due to personal matters, but in the meantime spooked the financial markets.

Reeves alluded to the pressures during her Mansion House speech on Tuesday. “Recently, on a visit to a school, a girl asked me – ‘what job would you do if you could do any job in the world?’ Given the events of the last few weeks, I suspect many of you would sympathise if I had said – ‘anything but chancellor.’ But I didn’t. I am proud to stand here tonight and address you for a second time at Mansion House as the chancellor of exchequer,” she said.