Manipulating bond and commodity markets also might be criminalised as part of government promise to clean up City

Rigging the foreign exchange, bond and commodity markets could become a criminal offence, the government will warn the City on Thursday as part of its latest effort to clean up the financial markets after a wave of scandals and allegations relating to key benchmarks.

Criminal offences for manipulating these global markets, which are based in London, will be among measures considered in a year-long review being launched by the chancellor, which was immediately criticised by Labour for being too late.

It follows steps in 2012 to allow prison sentences of up to seven years for anyone involved in rigging the key interest rate benchmark Libor.

George Osborne is expected to say in his Mansion House speech: "The integrity of the City matters to the economy of Britain.

"Markets here set the interest rates for people's mortgages, the exchange rates for our exports and holidays, and the commodity prices for the goods we buy. I am going to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them."

A European directive published in February set out rules for making abuse of such markets a criminal offence, but Osborne intends to opt out of this directive – a move a Treasury source insisted was not intended to delay the implementation of possible prison sentences but to give the UK the ability to bring in new rules more quickly than the EU's 2016 deadline.

The chancellor is asking the new deputy governor of the Bank of England, Minouche Shafik, to lead the review of "fair and effective markets along with Martin Wheatley, the boss of the Financial Conduct Authority who led a review into Libor rigging, and Charles Roxburgh, the director general of financial services at the Treasury.

But any tougher regime will take time to implement as the review will not be completed until after the general election and a consultation on the review will not begin until the autumn.

Cathy Jamieson MP, the shadow financial secretary, said: "This review is too little, too late. We pressed ministers to regulate commodities markets and the full array of financial benchmarks back in 2012, but the chancellor failed to act."

The Libor-rigging scandal, blown open in June 2012 when Barclays was fined £290m by regulators in the UK and US, prompted scrutiny of other benchmarks used to price financial products and has led to investigations into the £3tn-a-day currency markets as well as an analysis of gold pricing.

The chancellor signalled his intention to target foreign exchange markets – already under investigation by regulators in the UK and abroad – at a conference last week, when he said he had to ensure the UK was "bolstering the integrity of the London markets".

A panel of market users is also being set up to contribute to the new review.

The chancellor will be speaking alongside the Bank's governor, Mark Carney, who last month warned that capitalism could destroy itself and criticised bankers' adoption of a "heads I win, tails you lose" system.

The global Financial Stability Board, chaired by Carney, is working on ways to bolster the forex markets, which trade 24 hours a day but rely on a daily "fix" at 4pm. The Bank has called in Anthony Grabiner, a leading QC, to look into whether its staff condoned manipulation of the markets.

Osborne also intends to consult on extending one of the recommendations of the parliamentary commission on banking standards, chaired by the Conservative MP Andrew Tyrie and set up after the Barclays fine, for new regimes governing senior managers and the certification of top bankers. This could be extended to foreign bankers with branches in the UK.