Reeves shrugs off calls for resignation as she promises growth plan

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Chancellor Rachel Reeves ignored calls for her resignation, insisting to MPs that her economic plans could bring a “huge” reward and defending her visit to China last week.

In her first appearance in the House of Commons since market turmoil hit her economic plans last week, Reeves was accused by her counterpart Mel Stride of being part of a “Shakespearean tragedy”.

“To go or not to go is the question now,” Stride said. But Reeves, who was praised by Labor MPs, said in the coming weeks she would set out more details about a plan to revive the sluggish economy.

“If we get it right, the prize we will be offering the British public will be huge,” she said. Reeves claimed that the recent bond market turmoil affecting UK borrowing reflects “global economic uncertainty”.

Stride claimed that Reeves should have stayed in Britain to reassure markets rather than going to China “with the begging bowl”. Reeves said building trade relations with Beijing is essential.

“Not participating is not an option,” she said, although Reeves added that she had raised questions about human rights with Chinese leaders and denounced the “completely baseless sanctions on British parliamentarians.”

The Chancellor has come under increasing pressure to develop a plan to change the course of the economy.

UK borrowing costs have reached their highest levels in 16 years amid growing investor fears of stagflation, which combines anemic growth with persistent price pressures.

The pressures in the UK market come amid a global sell-off in government bonds in recent weeks, partly fueled by fears that tariffs proposed by US President-elect Donald Trump would be inflationary.

The government bond market was stable after the Chancellor’s initial comments, with the 10-year bond yield steady at 4.88 per cent, well below last week’s post-financial crisis high of 4.93 per cent.

Reeves’ statement came amid growing unrest among Labor MPs over the Chancellor’s handling of the economy, with many still deeply unhappy with her decision last year to scrap winter fuel payments for 10 million pensioners.

On Monday, the No10 newspaper took the unusual step of announcing that Starmer expected Reeves to remain in office until the election, just hours after the Prime Minister refused to make such an assurance.

One newly elected Labor MP said: “Some people are looking at the polls and worrying about their seats. “There is a risk of Rachel Reeves becoming a lightning rod for what goes wrong, but I don’t think we’re there yet.”

This is a developing story