Notifications can be managed in browser preferences.
Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in
Chancellor to address parliament as economic pressure mounts over cost of borrowing and falling pound
Independent Premium
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it’s investigating the financials of Elon Musk’s pro-Trump PAC or producing our latest documentary, ‘The A Word’, which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Chancellor Rachel Reeves has been warned that imposing public spending cuts would be “political suicide”, after the Treasury vowed to be “ruthless” in seeking to quell the current economic turmoil.
Ms Reeves is set to make a statement to the Commons on Tuesday following her trip to China, after the cost of government borrowing hit its highest level since the financial crisis by one measure, and the value of the pound fell.
In a bid to calm the markets – as the rise in gilt yields eviscerates the £9bn of “headroom” left in the chancellor’s Budget, leaving her at risk of breaking her fiscal rules – Ms Reeves was reportedly ordering cabinet ministers to be “ruthless” in identifying public spending cuts.
But former Labour shadow chancellor John McDonnell warned on Tuesday morning that further spending cuts would amount to “political suicide” and risked turning an economic “crisis into a recession” by taking demand out of the economy.
As speculation mounted on Monday that Sir Keir Starmer could sack her, Downing Street insisted that Ms Reeves will be the chancellor “for the whole of this parliament”.
Kemi Badenoch’s description of grooming gangs as “peasants” from “subcommunities” is not language the Prime Minister would use, Downing Street has said.
“I don’t think that’s language he would use,” the prime minister’s official spokesperson said.
Asked why, he said: “It’s not language he’s used, or indeed, I’d envisage him using.”
Tory leader Kemi Badenoch has blamed “peasants” from “sub-communities” within foreign countries for the grooming gangs crisis.
Jessica Coates has more details in this report:
The Conservative leader repeated calls for a national inquiry into the issue.
The Treasury’s Debt Management Office sold £1bn of 30-year bonds today in a useful test for Rachel Reeves and the bond market’s tolerance for her budget.
Result: not great, but ok. The bonds were all sold; three times oversubscribed indeed, although with slightly weaker demand that previous auctions.
In the broader bond market, yields – the rate buyers demand for buying the debt, lower is better for the borrower, in this case the government – fell slightly. They are 0.006 per cent lower than yesterday on benchmark 10-year bonds, at 4.887 per cent.
The market unease around UK government bonds appears to be linked to a delayed response to Rachel Reeves’ autumn Budget, the head of a prominent economics consultancy has suggested.
“It’s been a relatively dramatic couple of weeks for the gilts markets and for the pound,” Nina Skero, chief executive of the Centre for Economics and Business Research (CEBR), told the BBC.
“It’s been somewhat of a worldwide phenomenon, but it seems to be particularly intense in the UK.”
Suggesting that the current woes relate to a “delayed response to the very heavy tax and spend in the Budget”, Ms Skero warned that “we’re going to have to wait some months, maybe even some quarters, to see the real impact”.
In a reference to its infamous stunt questioning whether Liz Truss would survive longer in Downing Street than a wilting lettuce, the Daily Star has now set under-fire chancellor Rachel Reeves in its sights, as editors asked whether they should once again be in the market for leafy greens.
In his latest column, our chief political commentator John Rentoul writes:
It may be a silly question, but is the prime minister to blame for encouraging the speculation about Rachel Reeves’s future when he failed to answer it, twice, after his speech on the great opportunities of artificial intelligence?
This contradicted one of the unwritten rules of British politics, which is that chancellors are always “unassailable” – Margaret Thatcher’s description of Nigel Lawson – until they aren’t.
The reason for that is that prime ministers’ fates are tied to those of their most important minister. That is especially so in this case: Starmer and Reeves have been a double act for four years.
It would be disastrous for Starmer to dispense with his chancellor. It would in effect be a vote of no confidence in himself. It would be an attempt to write off the first six months of this government – but instead of starting again with a clean sheet, it would simply deepen the crisis and lead to pressure to change prime minister instead.
If the prime minister were to remove his chancellor over failed policies that he himself had agreed, he would destroy his government, says John Rentoul
UK anti-corruption minister Tulip Siddiq has reportedly been named in a second corruption probe in Bangladesh over a plot of land her family received from her despot aunt’s government.
The anti-corruption commission in Bangladesh has alleged Ms Siddiq used “her influence” while serving as an MP to acquire the land for her mother Sheikh Rehana and two other plots of land for her siblings, according to documents seen by Sky News.
However, a Labour source said Ms Siddiq totally refutes the claims and has not been contacted by anyone on the matter. They also said no evidence had been presented for the allegations.
Ms Siddiq is the niece of the Sheikh Hasina, the longest-serving prime minister of Bangladesh who is now in India after being ousted last year.
The latest claim is separate to a probe into allegations of embezzlement in a nuclear deal struck by Sheikh Hasina, in which Ms Siddiq has also been mentioned.
Our political correspondent Millie Cooke has the report:
Sir Keir Starmer facing growing calls to sack his anti-corruption minister, who referred herself to standards watchdog last week
Tory shadow financial secretary to the Treasury Gareth Davies has denied the previous Conservative government had left behind a “terrible situation” for the chancellor and claimed that she “made it worse” with the autumn Budget.
Asked whether he would accept that her economic inheritance was not good, he told Sky News: “It was a lot better than it is today.”
Mr Davies added: “She needs to urgently get a grip of this and make sure she can calm nerves. I understand she’s coming to the House today under the guise of an update on her visit to China but let’s be clear what this is about: this is about her having to come out to calm markets, calm nerves because it’s clearly very troubling out there.”
Elon Musk has become even more unpopular in the UK following his interventions on the grooming gangs scandal, polling by YouGov suggests.
Polling conducted last week found that the billionaire’s net favourability rating had fallen five points since November to hit minus 51 per cent – with 71 per cent of the British public saying they had an unfavourable view of the Tesla owner.
And despite his campaign against the government and support for far-right activist Tommy Robinson over the issue of grooming gangs, polling suggests the British public trust him less with regards to the scandal than Sir Keir Starmer.
Just 15 per cent of people surveyed said they trust Mr Musk on the issue, compared with 69 per cent who said they did not.
Nigel Farage had a slight edge over Sir Keir in ratings of his trustworthiness on the issue, while a larger proportion of voters appeared undecided on whether to trust Tory leader Kemi Badenoch.
Embattled Chancellor Rachel Reeves has been given a stern warning by ex Labour Shadow Chancellor John McDonnell not to impose big welfare cuts to head off the economic crisis.
Leading left-wing MP Mr McDonnell said such a move would be ”politically suicidal” and would result in a backlash from hard-up voters and trigger a recession, he said.
Britain had 165 billionaires and it was time to make them pay more tax, he added.
Simon Walters has the full report:
Ex-shadow chancellor calls for wealth tax to tackle economic crisis
Join thought-provoking conversations, follow other Independent readers and see their replies
Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in
