Failing British Prime Minister Starmer Refuses to Guarantee That Rachel Reeves Will Remain Chancellor Amid Bond Yields Rising, High Inflation and a Sinking Sterling Pound
British Prime Minister Keir Starmer is failing in many different aspects of governing, but right now, the economic woes are becoming so severe that they are becoming more concerning than the social turmoil or even the damaging investigations of corruption against Tulip Siddiq, the UK’s Minister of State for Economic Crime and Corporate Transparency, accused, along with her family, of taking bribes of up to £4 billion related to a Russia-funded nuclear power plant deal in Bangladesh.
The UK is facing economic turmoil, with bond yields up at a 25-year high, which increases government borrowing costs, and domestic inflation at 2.6%, above the Bank of England’s target.
Add to that the weakness of the sterling pound, and the import costs and inflation fears are rising – potentially leading to higher interest rates.
High debt servicing costs might force a ‘Sophie’s choice’ between tax increases or spending cuts, slowing economic growth. While all that is happening, the Chancellor (Finance Minister) Rachel Reeves sees her future thrown into doubt by the Prime Minister.
Yesterday (13), Starmer twice refused to guarantee that Reeves would remain Chancellor at the next election.
The Telegraph reported:
“His spokesman was later forced to insist that the Chancellor would be kept in post, but the Prime Minister’s comments prompted one Labour MP to privately call for her to be sacked if the situation does not improve. There is speculation that Ms. Reeves could be replaced by Pat McFadden, the Chancellor of the Duchy of Lancaster who is often described as the de facto deputy prime minister, or Wes Streeting, the Health Secretary.”
Starmer also appointed Olaf Henricson-Bell as director of policy in a blow to Reeves’ authority.
“The Conservatives accused Sir Keir of using the Chancellor as a ‘scapegoat’ for the dire state of the economy, while Reform UK said she was merely implementing ‘his economic agenda’.”
Conservative MP Gareth Davies, shadow financial secretary, on X:
In the first half of last year, our economy was on a positive trajectory with growth up and inflation down.
Since then, Labour’s Budget has undermined confidence with lower growth and higher inflation.
The Chancellor urgently needs to get a grip and change course before the… pic.twitter.com/Kd2JLdA9L7
— Gareth Davies MP (@GarethDavies_MP) January 14, 2025
Richard Tice, deputy leader of Reform UK, on X:
Back from her pointless trip to China, the Chancellor refused to answer my simple question:
When will the British economy start growing again? pic.twitter.com/n6t78oxIWJ
— Richard Tice MP (@TiceRichard) January 14, 2025
Reeves is under growing pressure over the sad state of the economy’s public finances, with oil prices at a six-month high and the pound at a new 14-month low.
“The refusal to offer a guarantee set hares running in Westminster, because Downing Street had shown its support for David Lammy, the Foreign Secretary, when facing similar questions last year.”
Starmer refused to say ‘yes or no’ to whether Ms Reeves would still be Chancellor at the next general election.
“He merely said: ‘That is why I am confident in our mission for growth and I am confident, completely confident, in my team. We never pretended, nor would anybody sensibly argue, that after 14 years of failure you can turn around our economy and our public services before Christmas’.”
One Labour MP told the Telegraph ‘off the record’ that Starmer should sack the Chancellor if she has not stabilized the economy by the summer.
“The backbencher said that ‘questions are going to start to be asked’ about the Chancellor’s future if she does not demonstrate that she has the ‘capabilities to take our country forward’ in the coming months. They added: ‘If by June we do not see the kind of economic decisions being made which are believed to be able to drive our country forward, stabilize our economy and to protect our public services… then I think people will want greater scrutiny over whether or not she has got the capability to be able to secure our economy for the longer term’.”
The Prime Minister’s official spokesman was forced to insist that Reeves would still be Chancellor at the next general election – which is, frankly, unlikely.
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