Markets reacted to an apparently clear signal that all is not well at the heart of the British government after the first appearance by the Chancellor of the Exchequer after Tuesday night’s bruising parliamentary rebellion saw her unable to hold back tears.
United Kingdom Chancellor of the Exchequer (finance minister equivalent) Rachel Reeves sat behind the Prime Minister at the country’s weekly Parliamentary questions session on Wednesday in a state of visible distress, with live television footage showing tears rolling down her cheeks.
Markets instantly reacted to the signal, with the Conservative Party’s Lord Kempsell, a former journalist poacher-turned gamekeeper who worked as director of research for the party before joining the House of Lords as a lawmaker, noting data made it “definitive” that Reeves crying spiked the gilt market. The peer wrote “Chart long gilt futures contract when chancellor cried” and suggesting it is now only a “matter of time” until she leaves office.
Wednesday’s spike, while smaller than others recently experienced by UK government gilts, nevertheless underlines concerns about the United Kingdom government’s ability to service its debt.
The Commons chamber display came hours after a rebellion by government party Members of Parliament saw Reeves’ and Prime Minister Sir Keir Starmer’s welfare reform bill left in tatters, with its cost-saving provisions stripped away, leaving the government with billions of spending liabilities it had intended to eliminate, making tax rises in the Autumn more likely.
Downing Street has attempted to downplay the events of Wednesday, however, insisting Reeves was emotional over a private matter and said they were definitely not intending to fire the Chancellor.
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