‘Here for the long haul’: Reeves defends her position after market turmoil
Rachel Reeves has insisted she is “here for the long haul” as she defended her position as Chancellor in the wake of bond market turmoil and rising government borrowing costs.
The UK’s Chancellor has faced criticism for embarking on a trip to China last weekend while government borrowing costs surged and the value of the pound slumped.
Speaking to the BBC’s Political Thinking podcast, she told presenter Nick Robinson that she rejected comparisons to short-lived former prime minister Liz Truss who left office after 49 days, insisting: “I’m here for the long haul.”
Reeves said: “Every decision I make has consequences, but so does the counterfactual. If I had made the decision not to address those very real pressures, then this is the consequence: borrowing costs would have gone through the roof.
“Borrowing costs not just for the government but for families and businesses, like it did when Liz Truss was prime minister.”
Indicators of the health of the economy have since provided some relief, with inflation falling unexpectedly and a return to growth, despite being weaker than expected at 0.1 per cent.
This helped bring some calm to the financial markets, with the cost of government borrowing easing back since Wednesday in a sign of improved sentiment among traders.
“This is not a British phenomenon”
Recent data has also raised hopes that interest rates could be cut again next month, helping drive a rally for the UK’s FTSE 100 index which touched a new all-time high level on Friday.
Discussing the recent financial turmoil, the Chancellor stressed: “Every country in the last week or so has seen borrowing costs increase. This is not a British phenomenon.”
She told listeners that when speaking to Bank of England (BoE) governor Andrew Bailey and International Monetary Fund (IMF) director Kristalina Georgieva, “they made the point that the only time where UK financial markets have been out of step with global financial markets was when Liz Truss was Prime Minister”.
And she added: “I just don’t accept this is somehow something that’s been happening in Britain… there’s been a lot of global uncertainty and Britain is not immune to it.”
On her plans for the UK to grow, Reeves said: “Our economy has not been competitive enough, people’s wages have stagnated. We’ve got a lot of work to do.
“Growth is still not good enough… the economy is growing – but it’s not growing enough. It’s not growing enough to improve the living standards of working people.
“That’s why the planning reform, the trade deals, the reform to our pensions system and capital markets, the regulatory reform – we’ve got a big agenda, we’ve got a lot to do.”