Reeves rejects claims economic turbulence is a ‘crisis made in Downing Street’ but admits need to ‘go faster’
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The chancellor faced a grilling from MPs in the Commons after the cost of government borrowing increased and the value of the pound fell, putting her plans for the nation’s finances at risk. Rachel Reeves has launched a defence of her economic plan, rejecting claims that turbulence in the financial markets is a “crisis made in Downing Street” and urging her critics to “get real”.
But facing a grilling from MPs in the Commons after the cost of government borrowing increased and the value of the pound fell in recent days, putting her plans for the nation’s finances at risk, the chancellor admitted it underlines the need to go “further and faster” in search of economic growth.
While she doubled down on a commitment to stick to the government’s fiscal rules, she refused to rule out future spending cuts, saying she won’t write “five years of budgets in the first six months of a Labour government.”. The rules require day-to-day spending to be met from revenues rather than further borrowing. But rising borrowing costs eat into the funding available, which could force Ms Reeves to act to either reduce spending or raise taxes to comply with her rules when the budget watchdog gives its updated forecast in March.
Ms Reeves also insisted that the rise in bond yields seen in the UK markets is an international problem, saying: “I do not believe that it is reasonable to suggest that the reason why bond yields in the United States, in Germany and France have risen is because of decisions now by this of government.”.
