Britain's Chancellor in Tears as Investors Turn on Government
The selloff came hours after the government of Prime Minister Keir Starmer shelved a plan to cut disability payments following a rebellion by Labour's own lawmakers. The U-turn raised the prospect of the government hiking taxes or issuing more debt in to fund its welfare system. It also casts doubt over the future of Rachel Reeves, the U.K. chancellor, who took the job just over a year ago promising a return to economic stability in Britain by sticking to strict spending rules.
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Associated Press
24 minutes ago
- Associated Press
How a tear or two spooked markets and dominated UK's political narrative
LONDON (AP) — The weekly session in which the British prime minister is questioned by lawmakers in Parliament can be an ordeal for the government leader. For Cabinet members, it's usually simply a matter of backing their boss. But on Wednesday the spotlight ended up on Chancellor of the Exchequer Rachel Reeves during the Prime Minister's Questions session because it became evident that she was crying as she sat beside Prime Minister Keir Starmer. It's not known what triggered the tears, later said to have been personal. They came as Starmer sought to fend off attacks that his year-old government was losing its authority and that he was about to fire Reeves to regain the initiative. Markets spooked Traders got spooked, with the interest rate charged on the U.K.'s 10-year benchmark bond in the markets up sharply, and the pound down. The moves were a sign investors had lost confidence in U.K. financial assets. Reeves had become associated with fiscal discipline, in particular a rule of covering day-to-day government spending with tax revenue, said Andrew Wishart, an economist at Berenberg Bank. 'The markets are concerned that if the Chancellor goes, such fiscal discipline would follow her out of the door,' he added. With Starmer insisting Thursday that Reeves would remain in post, the markets calmed down. Prime minister's weekly ordeal Prime Minister's Questions, or PMQs, can come as close to a gladiatorial contest as is possible in a modern legislative chamber. Very little deference is given to the man or woman holding the highest office in the land. The prime minister is considered the first among equals. Like all other members of Parliament, the prime minister represents one of 650 constituencies. And nowhere is that shared connection more noticeable than at noon every Wednesday in the House of Commons. Starmer stands for half an hour every week to be quizzed by friends and foes. He may get soft balls, but there's always a potential zinger around the corner. The leader of the biggest opposition party, currently the Conservative Party's Kemi Badenoch, has the best chance to knock the prime minister off course. With six questions, she can lay traps and go for the jugular. Typically it's more theater than substance, and the weekly shouting match is consistently the most-watched parliamentary event, viewed around the world, including on C-Span in the United States. This week was fraught This week's session appeared to have more at stake than usual following a chaotic run-up to a welfare reform bill. With scores of Labour lawmakers opposed, Starmer was forced to scrap key planks of the bill — at a cost, politically and economically. For a prime minister, with one of the biggest majorities in history, it was a sign of weakness. Many Labour MPs blame Reeves, for her rigid adherence to her budget rules. As usual, Starmer was flanked to his left by Reeves, who didn't look her usual self, clearly bloated around the eyes. Badenoch showed little mercy, describing Reeves as 'absolutely miserable' and a 'human shield' for Starmer. She asked Starmer whether he could repeat a pledge that Reeves would stay in her post until the general election, which has to take place by the middle of 2029. While praising Reeves' handling of the economy, Starmer didn't give that assurance, and it was around this point that Reeves wiped away a tear. 'How awful for the Chancellor that he couldn't confirm that she would stay in place,' Badenoch responded. The immediate political aftermath Starmer's Downing Street operation faced questions over Reeves' teary appearance. Could it have been hay fever? Had Starmer told Reeves she would be fired for the government's recent woes, which has seen Labour's approval ratings slide? Starmer's press spokesman said it was a 'personal matter,' insisted Reeves was 'going nowhere' and had the prime minister's 'full backing.' Later, Starmer told the BBC that Reeves would be Chancellor for a 'very long time' and that it was 'absolutely wrong' to suggest her distress was related to the welfare U-turn. A day on Images of Reeves' agitated state were emblazoned across newspapers and remained a key item on the news agenda. Starmer repeated on Thursday that Reeves would remain Chancellor 'for years to come' and sought to explain why he hadn't comforted Reeves during PMQs. 'In PMQs, it is bang, bang, bang,' he said at an event where he and Reeves hugged. 'That's what it was yesterday and therefore I was probably the last to appreciate anything going on in the chamber.' Reeves appeared more like her usual self. 'People saw I was upset, but that was yesterday,' she told Sky News. 'I guess the thing that is different from my job and many of your viewers is that when I'm having a tough day, it's on the telly.'
Yahoo
24 minutes ago
- Yahoo
Moody's raises Southern Water's outlook after Macquarie's $1.63 billion boost
(Reuters) -Ratings agency Moody's on Thursday raised Southern Water's outlook to stable from a review for downgrade, after the British water utility secured an equity lifeline from Australia's Macquarie and a credit refinancing to avert a debt crisis. Moody's also confirmed Southern Water's rating at 'Ba1'. The firm's bonds were up on Thursday, adding to the sharp jump they saw after a consortium led by Macquarie Asset Management agreed to inject up to 1.2 billion pounds ($1.64 billion) in Southern Water on Tuesday. While the utility faces performance penalties from Britain's water regulator and potential cost overruns, the equity injection provides Southern Water with enough buffer to maintain its credit quality, Moody's said in a report. ($1 = 0.7331 pounds)
Yahoo
an hour ago
- Yahoo
F1 chief Stefano Domenicali tells Keir Starmer what sets the UK apart: ‘The home of our sport'
Formula 1 president Stefano Domenicali has revealed what sets the UK apart in the sport in a meeting with Prime Minister Keir Starmer ahead of Silverstone. Starmer welcomed a host of F1 personalities, including drivers Carlos Sainz, Alex Albon, Ollie Bearman and Esteban Ocon, to 10 Downing Street on Wednesday in celebration of the sport's 75th anniversary year. Advertisement With close to half a million set to flock to the British Grand Prix this weekend, Domenicali believes it is not simply the country's passion for motorsport that makes it so integral to F1, but also what it puts into the industry, highlighting the UK's burgeoning employment sector in F1 that is unmatched by any other. "Next year, nine of the 11 Formula 1 teams will have a base here. We have our office and technical centre here in the UK. No other country can make that claim, and we are very proud of it,' said Domenicali. "But this is not just about the presence here, it is about what we bring with fans, employees at 4,500 companies working with the sport, 41,000 jobs linked to the F1. And 25,000 highly skilled engineers. We generate over £12bn to the UK economy and help keep the country a leader in world-class innovation, technology and skills. "This country is passionate about Formula 1 motorsport, and very proud of it. Seventy-five years ago, Formula 1 started here in the UK at Silverstone in 1950. Since then, it has become a British institution with deep roots and a huge contribution to the country.' Advertisement Domenicali has run the sport since 2019 and recently agreed a new five-year deal to remain in his post. Other attendees at Downing Street included leaders of the incoming Cadillac F1 operation Graeme Lowdon and Daniel Towriss, F1 Academy managing director Susie Wolff, and F1 legends Sir Jackie Stewart, Damon Hill, Martin Brundle and Jenson Button. Starmer added: "It is really great to have you and to celebrate that so many teams have chosen the UK as their base. This is pretty extraordinary - the sheer number of teams that are based here, just like the headquarters of Formula 1 itself. And next season's new teams on the grid - Cadillac, which opened a new facility at Silverstone, and Audi's building its technical centre near there as well. "So the continuation of the British stamp on the sport is absolutely there. In fact, there is only one team without a presence here, and I did wonder whether it would be too much of a diplomatic incident if I tried to lure Ferrari out of Italy, and whether it would increase our relationship or not!" The British GP is race 12 of the 2025 F1 season and will be nine-time winner Lewis Hamilton's first home race in Ferrari red.
