Fury as Rachel Reeves defies backlash and arrives in China after ‘dragging Britain back to the 1970s’
EMBATTLED Rachel Reeves arrived in China today amid fury over a major debt crisis and a plummeting economy at home.
The under-siege Chancellor took off for Beijing last night as yields on UK bonds surged to their highest level since the 2008 financial crisis and far beyond the doomed Liz Truss era.
The Tories hammered Ms Reeves, suggesting that she be sacked over the fall-out of her October Budget.
One Cabinet colleague even privately accused her of having “lost the plot”.
This morning Shadow Business Minister Dame Harriet Baldwin blasted the Chancellor for having made things “substantially worse” for the economy.
Dame Harriet told Sky News: “In the first half of last year the UK economy was actually growing the fastest in the G7, so it was showing some very promising signs in the first half of last year.
“Unfortunately what happened after the election was that by talking very negatively about the UK economy and then by implementing this massive Budget, which has huge implications in terms of taxes on businesses which create the growth in the country, the Chancellor seems to have stalled that economic recovery.
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“The reality is that the choices that the Chancellor took in her Budget have made things substantially worse than the global picture for the UK.”
Despite calls for Ms Reeves to sort out her mess at home, this morning Cabinet Ministers publicly rushed to their colleague’s defence.
Culture Secretary Lisa Nandy insisted “we should not be worried” and said the Labour administration’s tax and spend rules are “non-negotiable”.
Ms Nandy told Sky News: “I don’t think we should be worried.
“It’s obviously something we take very seriously, but these are global trends that have affected many countries, most notably the United States, as well as the UK.
“We are still on track to be the fastest growing economy, according to the OECD in Europe.”
She added: “We’re not going to borrow for day-to-day spending.”
Defending the trip to China, the Culture Secretary said: “China is the second-largest economy, and what China does has the biggest impact on people from Stockton to Sunderland, right across the UK, and it’s absolutely essential that we have a relationship with them.
“We need to make sure that the UK economy remains competitive, we need to challenge where we must, including in the area of human rights, but we also need to make sure that we are working with China on those areas of shared interest.”
The Chancellor’s tax-hiking Budget, which hammered employers with a steep national insurance rise, was blamed for the market turmoil.
And Ms Reeves was last night warned that if she goes to the Far East she risks being the next Kwasi Kwarteng — Ms Truss’s Chancellor who infamously left the UK as the economy went into meltdown in 2022.
The warning came amid the threat of industrial action, like the strikes of 1978 and 1979’s winter of discontent, with teachers threatening to walk out.
Economists also raised the prospect of a 1976-style debt crisis “nightmare” of the kind that forced Jim Callaghan’s Labour government to go cap in hand to the International Monetary Fund for a bailout.
Shadow Home Secretary Chris Philp told our Never Mind The Ballots show: “I think the Chancellor should stay in the UK fixing the mess her Budget has created.
“Bond yields are higher than when Kwasi Kwarteng got sacked.
“The whole government should be fired, frankly, including Rachel Reeves, because they jacked up taxes, they crushed pensioners, they’re crushing farmers.
“They’re crushing businesses with their high taxes.
“And this is the result, because the bond market can see that our economy is being squashed by this Labour government.”
Word not her bond
GOVERNMENT bonds are back in the headlines — in bad news for the economy and the Chancellor.
Rachel Reeves built her run-up to No 11 on the very promise she would be the safe opposite to Liz Truss’s market meltdown.
Comparisons to 2022’s gilt crisis are slightly overdone.
The bond sell-off has not been as sudden, or required the Bank of England to step in — yet.
But more worryingly, experts are comparing it to the nightmarish 1970s because the Pound is being punished as well.
It suggests global investors are taking a very dim view of Reeves’ Budget and the UK’s hopes of growth.
A weaker Pound means surging interest demands on ten year government bonds.
These are used by high street banks to price mortgages and suggest we will suffer more expensive home loans for longer.
Squeezed household finances will stifle spending and depress growth.
So much for Reeves’ promised “Securonomics”