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UK PM gives full backing to Reeves after tearful appearance in parliament

  • British Chancellor Rachel Reeves appeared in tears during Prime Minister's Questions on Wednesday in the House of Commons following welfare reform U-turns.
  • The welfare reform U-turns stemmed from strong opposition by Labour MPs to restricting eligibility for personal independence payments and an inflexible timetable set by Reeves.
  • The government abandoned welfare savings of about £5 billion planned for this parliament, which worsened public finance projections and increased market nervousness.
  • The value of the pound fell almost 1% and long-term government bonds slumped sharply after Reeves’s emotional appearance amid fears she might be replaced, though Downing Street insists she is staying.
  • Prime Minister Keir Starmer and his office affirmed full backing for Reeves, emphasizing she will remain Chancellor, while the government faces challenging fiscal decisions in the upcoming budget.
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Market Screener broke the news in on Wednesday, July 2, 2025.
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