Rachel Reeves was crying on Wednesday as Sir Keir Starmer took the despatch box. This was very different from how she usually acts, which is steely and calm. Some people say it wasn’t fair for the media to focus on this emotional display, but the financial markets reacted quickly. The markets’ bad reaction made people worry that Reeves would soon be removed as Chancellor, which would have big effects on the country’s financial policy.

Many experts think that the market’s drop was linked to the chance of a change in leadership. If Reeves were to leave, the new Chancellor might be more lax about how much money the government spends, which could lead to additional borrowing. People thought that this lack of stable leadership would hurt the UK’s economy, which is why the markets reacted right away.

What did Sir Keir Starmer and Reeves say?

Sir Keir Starmer officially reassured the country that Rachel Reeves would remain Chancellor for the time being to ease concerns. Starmer confirmed that Reeves’ position was secure, which helped calm some of the market’s anxieties. This reassurance contributed to a brief recovery in the markets, highlighting the importance of stable leadership during uncertain times.

Reeves also took steps to regain public trust in her leadership. In a brief interview, she explained that her emotional reaction was due to personal issues and a tough day. She reaffirmed her commitment to the role, stating she was ready to continue as Chancellor and work closely with Prime Minister Rishi Sunak. Despite the emotional moment, she was later seen at a hospital in East London, where she launched the government’s 10-year NHS plan. Although she did not address the earlier incident directly, she focused on discussing the health service and the economy’s future improvements. Here is the link to our article on Reeves’ Budget Signals

What are the biggest problems Rachel Reeves will have to deal with in the future?

Even if Starmer and Reeves both said things that made people feel better, the Chancellor still has a lot of problems to deal with. The government’s welfare programme is a major issue of disagreement within the Labour Party. Several Labour MPs have spoken out against the government’s actions, especially the austerity policies that have caused several U-turns. These MPs say that lowering assistance and balancing the budget by taking money from impoverished people is not a long-term answer.

Also, there is a growing gap between the Chancellor and many Labour MPs when it comes to fiscal policy. One member of the cabinet said that a “cuts Budget” issued in the fall would encounter considerable opposition from Labour MPs. This shows that budgetary discipline must come with careful consideration of how it will affect social welfare.

On the other hand, Reeves and the Prime Minister have said that they want to limit how much money the government may borrow. They would rather not raise taxes than spend less. But this position has put them at conflict with certain members of their party, who want more progressive ways to handle money.

The Last Thoughts: What does the future hold for Rachel Reeves?

The emotional scene in the House of Commons showed how much stress Chancellor Rachel Reeves was under. Even if Sir Keir Starmer backed her and the public was persuaded of her devotion to the job, the main problems within the Labour Party are still not fixed. The continuous debate over government borrowing, welfare reforms, and economic policies will probably have an impact on Reeves’ time in office. Her ability to deal with these problems while keeping the party together and the market’s trust will be important for her to stay in charge. As things happen, it’s apparent that Reeves’ job as Chancellor will be watched.