RACHEL Reeves has been condemned for laughing in Parliament as she faced rising borrowing costs and a falling pound.
The chancellor was forced out of hiding after flying to China as Britain’s economy took a hit.
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Chancellor Rachel Reeves faces MPs after a week of market turmoilCredit: Pixel8000
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Rachel Reeves was caught laughing along with other Labor leaders
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Rachel Reeves flew to China over the weekend for trade and investment talks
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Sir Keir Starmer dodged questions about whether the chancellor will remain in office until the end of parliamentCredit: Getty
It comes as Tulip Siddiq resigned as anti-corruption minister over her links to Bangladesh’s previous despotic regime.
The finance minister was forced to resign just over a week after she referred the sleaze watchdog for an investigation.
Ms Siddiq has denied all the allegations against her, but it was alleged that she benefited financially from three properties in London linked to her aunt – the former prime minister of Bangladesh.
Ms Reeves was questioned in the Commons by shadow chancellor Mel Stride who accused her of “flying halfway around the world with a begging bowl” while markets spiraled.
Market turmoil has seen UK borrowing costs hit a 27-year high and the pound has fallen to its lowest level since 2023.
Mr Stride compared her current position to a Shakespearean tragedy, adding: “To go or not to go? That’s the question now.”
But as he delved into her stewardship of the economy, the chancellor was seen smiling alongside the Labor frontbenchers.
She then hit back at her colleague, insisting she “doesn’t mean it”.
And defending herself, she claimed “global factors” were behind the market turmoil and that growth was the main mission of the Government.
She told MPs: “We saw global economic uncertainty last week.
“But leadership isn’t about avoiding these challenges, it’s about bringing them.
“The economic headwinds we face are a reminder that we should — indeed, must — go further and faster in our plan to drive economic growth.”
In a scathing response to her laugh, the Tories wrote on X: “Labour thinks losing control of the public finances and sending the economy into crisis is ridiculous… Disgraceful.”
During her statement, Ms Reeves also said the deals reached in Beijing and Shanghai, where she led talks on trade and investment, would be worth £600m to the UK over the next five years.
But Mr. Stride said “a black hole has opened up in the public finances while (Mrs Reeves) has been away from her post”.
“To give an idea of the scale, the job announced by the Chancellor is £120 million a year.
“The rise in our borrowing costs due to her disastrous budget has added around £12 billion to our annual spending on debt interest alone – literally 100 times what she said she brought back from Beijing.
“That’s money that can’t go to public priorities now, £12 billion is enough to pay 300,000 nurses, to cover Labour’s disastrous cuts to winter fuel payments for eight and a half years.”
The row in the Commons comes after Sir Keir Starmer poured fuel on the fire yesterday by dodging questions about whether Ms Reeves would remain in No 11 for the long term, before Downing Street insisted she would remain in the position until the end of Parliament.
The yield on 30-year government bonds has jumped to levels not seen since the 2008 crash, prompting fears Labor could be forced to either raise taxes or cut public spending to balance the books.
Asked to rule out future spending cuts by SNP Westminster leader Stephen Flynn, Ms Reeves said: “I will not be writing a five-year budget in the first six months of a Labor government.
“But I am absolutely committed to delivering on the fiscal rules I set out in October’s Budget, because we know what happens when governments lose control of public finances, which is that they crash the economy and end up on that side of the House.”
Earlier today, former shadow chancellor John McDonnell warned that cuts to balance the books would be “politically suicidal”.
He told BBC Radio 4’s Today programme: “The electorate has to be protected, otherwise I’m afraid we’re faced with a level of disillusionment which then turns people towards Reform, unfortunately, and I think that would be a disaster for the country.”
The former leader, who has been suspended from Labor office, suggested the Government just needed to “see through” the market turmoil, but insisted there was a need for a wider review of economic strategy including intervention by the Bank of England “if necessary”.
Ministers were offered relief on Tuesday morning as the pound regained its footing after hitting fresh 14-month lows on Monday, while British government bonds clawed back some of what had been lost after a recent big sell-off.
Sterling held firm at US$1.22 in morning trade, after falling to its lowest level since November 2023 in recent days.
Government borrowing costs showed signs of stabilizing, with yields on 10-year UK bonds – also known as gilts – falling three basis points to 4.86 percent.
The yield on 30-year gilts hit a 27-year high on Monday, and 10-year yields rose to new highs not seen since 2008.
Yields are a key indicator of market confidence, moving inversely with bond prices.
They rise when investors are less willing to own debt, meaning they will pay a lower price for bonds.
Budget cuts across Whitehall
Deputy Political Editor Ryan Sabey
RACHEL Reeves returned to the House of Commons today to hit back at her critics – blaming global events for market turmoil. The Chancellor told MPs to “just get serious” because global volatility is to blame for the problems. She tried to take the lead by telling lawmakers that her plan for growth should include rocket boosters. She argued that the “economic winds” must go “further and faster” to raise living standards for millions of Britons. MPs in the House of Commons may have offered the chancellor some relief compared to the last few days. The shock in the market and accusations of fleeing to China have piled up questions for the chancellor Answer on return. She even got a huge vote of confidence from the prime minister – and we all know what happens to football managers when the board of directors backs them up. Reeves previously said there would only be one fiscal event or budget a year. But she today refused to rule out the full budget in March. But whatever she does, it will be difficult for the public and her cabinet colleagues to bear. They will stick to their fiscal rules and this is likely to lead to tighter budgets across Whitehall.
Her co-star Mel Stride asked her today: “To go or not to go, that’s the question now,” referring to William Shakespeare’s Hamlet.
As for Ms. Reeves, she digs in and isn’t going anywhere despite the twist.
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Source: HIS Education