UK markets ‘functioning’ and banking system ‘resilient’, Reeves tells MPs
Chancellor Rachel Reeves has spoken in the House of Commons on the “current economic situation” in the wake of US President Donald Trump’s sweeping new global trade tariffs.
Addressing MPs ahead of Treasury questions, Reeves said the “implications have been reflected in the reaction that we have seen in global markets in recent days, which the financial authorities have, of course, been monitoring closely”.
She told the House: “This morning, I spoke to the Governor of the Bank of England who has confirmed that markets are functioning effectively and that our banking system is resilient.”
The Chancellor added, “Over recent days, I have had discussions with my counterparts in Canada, Australia, Ireland, France, Spain, and France, and with the European Commission. We will pursue these talks in earnest.
“Tomorrow, I will hold talks with the Indian government as part of our two nations’ economic and financial dialogue as we seek to secure a new trade deal with India.”
The Chancellor also reiterated to MPs: “I think it is incredibly important to maintain cool heads at this moment. Tariffs have been imposed and we are working closely with our friends and counterparts from the United States to reduce the impact of those not just in the UK but around the world as well.
“At the same time, we are looking to secure better trading relationships with some of our biggest trading partners around the world.”
She said the government was looking at “sectoral responses on life sciences, on automotives, on steel as well” and stressed that the “fiscal rules are very important for giving our country the stability it needs”.
Reeves said: “We saw what happened when a previous government lost control of the public finances. It resulted in interest rates going through the roof, meaning higher costs for businesses and for working families.
“We won’t make those mistakes. That’s why the fiscal rules are non-negotiable and stability for this government is sacrosanct.”
The Chancellor also described the United States’ approach to tariffs as a “disproportional response to a genuine problem of global trade imbalances”.
And she appeared to dismiss a call from Liberal Democrat Treasury spokeswoman Daisy Cooper for the government to launch a “buy British” campaign in response to US tariffs.
Reeves replied that “what we don’t want to see is a trade war, with Britain becoming inward-looking, because if every country in the world decided that they only wanted to buy things produced in their country, that is not a good way forward.”