UK (Parliament Politics Magazine) – The British finance minister Rachel Reeves is ready to address parliament to regain market confidence amid growing economic concerns and calls for her resignation.
Just six months into her role after Labour’s electoral victory, she is under pressure from opposition MPs to resign despite the global increase in bond rates.
Last Friday, Rachel Reeves flew to China for her first two-day diplomatic visit, where she met several prominent figures and asserted that the visit was important for the British economy.
Reeves set to address on China visit
Chancellor Rachel Reeves will speak today about her weekend visit to China, which sparked backlash amid the UK’s worsening economic situation. Critics, including the Conservatives and Liberal Democrats, accused her of neglecting domestic economic issues like a weak pound and increasing borrowing costs.
While in Beijing and Shanghai, Ms Reeves met with business leaders, but her absence fueled speculation about rising tax hikes or spending cuts.
Keir Starmer defends Rachel Reeves
Prime Minister Keir Starmer defended Chancellor Rachel Reeves in Parliament on Monday, assuring his back amid ongoing questions about her role as finance minister.
Rachel Reeves is doing a fantastic job.
“She has my full confidence,”
Keir Starmer said, dismissing doubts about her handling of economic challenges.
Downing Street responded to rumors about Rachel Reeve’s resignation by confirming she would stay in the Cabinet until the general election. No 10 pledged that the Treasury would take a “ruthless” approach to spending cuts to comply with the government’s fiscal rules.
However, Sir Starmer did not answer whether Rachel Reeves would retain her position as Chancellor after the next election.
Opposition parties, in response, said Keir Starmer is trying to separate himself from Rachel Reeves.
John McDonnell warns Reeves over spending cuts
John McDonnell, the former shadow chancellor, has argued that Sir Keir Starmer and Chancellor Rachel’s early policy choices “tied our hands unnecessarily” and urged a review of the responsibilities they placed on themselves.
He described the spending cuts as a “politically suicidal” to financial instability, stating they would undermine Labour’s electoral support.
Mr McDonnell added,
“I think the scene was set to a certain extent before the election when we didn’t really have a thorough and open debate about the state of the economy and the options that we had available to us.”
John McDonnell served as shadow chancellor from 2015 to 2020, followed by Anneliese Dodds.
Rachel Reeves under pressure to address mortgage issues
On Monday, during the prime minister’s questions answer session which was focused on AI, turned to the ongoing economic challenges. With the pound declining to $1.21, its lowest point since November, alongside rising borrowing costs and increasing oil prices, fears over potential mortgage rate hikes grew stronger.
The Liberal Democrats urged Chancellor Rachel Reeves to arrange an urgent meeting with lenders to address growing concerns about mortgages.
Reeve’s visit to China and criticism from the opposition
Rachel Reeves, during her China visit, stated that she wants a long-term relationship with China, noting that the agreement signed in Beijing would secure £600 million for the UK over the next five years.
While criticizing Chancellor Rachel, the Tory leader stated that Reeves is “hanging on by her fingernails” as chancellor, adding, “Keir Starmer and Rachel Reeves have driven Britain’s economy into the ground.”
Rache Reeves is expected to defend her China visit in the House of Commons, saying,
“The talks have delivered a “set of tangible benefits to ensure that British firms have greater access to the Chinese market while safeguarding our national security.”