US EditionUK government borrowing costs spike amid tensions in ruling Labour party
- UK government borrowing costs surged sharply on Wednesday amid uncertainty over Chancellor Rachel Reeves's future during a parliamentary session in London.
- The spike followed a government U-turn on welfare reforms that wiped out nearly £5 billion in planned savings, raising concerns about fiscal credibility and Reeves's position.
- Reeves appeared tearful during Prime Minister's Questions as the pound fell 1.14% against the US dollar and gilt yields rose by 22 basis points, signaling investor unease.
- The Prime Minister's press secretary affirmed Reeves 'is going nowhere' and that she has 'the Prime Minister's full backing,' though rising borrowing costs suggest fiscal challenges ahead.
- The events underscore growing market pressure on the government to balance spending and borrowing, with potential tax increases needed to cover fiscal shortfalls under Reeves's strict borrowing rules.
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During the question time the Prime Minister does not explicitly confirm his support for the Minister of the Treasury. The fiasco of the Welfare reform
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UK Markets Slide as Finance Chief’s Future in Doubt
UK financial markets took a sharp hit on Tuesday, July 1st, as concerns mounted over Britain’s fiscal trajectory and the potential departure of Chancellor of the Exchequer Rachel Reeves. The pound dropped more than 1%, sinking below $1.36, while the FTSE 250 Index fell 1.5% and government borrowing costs surged. The selloff intensified after Prime Minister Keir Starmer declined to confirm whether Reeves would remain in her role through to the ne…
Coverage Details
Total News Sources29
Leaning Left5Leaning Right5Center7Last UpdatedBias Distribution41% Center
Bias Distribution
- 41% of the sources are Center
41% Center
L 29%
C 41%
R 29%
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