Rachel Reeves has insisted she is “here for the long haul” in a fightback following criticism of her response to financial market turbulence.
As she rebuffed critics of her economic decisions in her first broadcast interview since the turmoil erupted, the Chancellor also insisted she was “not going to let them get me down”.
The Prime Minister meanwhile suggested critics should stop being hung up on “every single decimal point on a daily basis” and rejected the idea that her future as Chancellor depended on short-term data.
Ms Reeves has faced criticism for continuing with a trip to China last weekend while government borrowing costs surged and the value of the pound slumped.
Indicators of the health of the economy have since provided Ms Reeves with some relief, with inflation falling unexpectedly and a return to growth, although this was weaker than expected at 0.1%.
This helped bring some calm to the financial markets, with the cost of government borrowing easing back since Wednesday in a sign of improved sentiment among traders.
The recent data has also raised hopes that interest rates could be cut again next month, helping drive a rally for the UK’s FTSE 100 index which touched a new all-time high level on Friday.
Speaking to the BBC’s Political Thinking podcast, Ms Reeves brushed off comparisons with short-lived Conservative prime minister Liz Truss, whose mini-budget spooked the financial markets in 2022 and led to a spike in mortgage rates.
The Chancellor said: “Every decision I make has consequences, but so does the counterfactual.
“If I had made the decision not to address those very real pressures, then this is the consequence: borrowing costs would have gone through the roof.
“Borrowing costs not just for Government but for families and businesses, like it did when Liz Truss was prime minister.”
Asked about comparisons with Ms Truss, who left office after 49 days, Ms Reeves added: “I’m here for the long haul.”
Some news reports suggested Sir Keir Starmer was considering ousting his Chancellor over her handling of the economy.
But the Prime Minister has insisted his long-term economic plan is working and that critics should stop being hung up on daily economic data.
“I’ve always said it would take time,” Sir Keir told the Financial Times, rejecting suggestions that Ms Reeves’ future as chancellor in some way depended on whether inflation last month was 2.5% or 2.6%.
“I don’t think that overreacting to each and every single decimal point on a daily basis is necessarily reflective. We know it’s going to be a long-term journey.”
Elsewhere, Ms Reeves insisted she had not taken criticism of her decisions personally.
She added: “Some people don’t want me to succeed. Some people don’t want this Government to succeed. That’s fair enough. That’s the prerogative, but I’m not going to let them get me down.
“I’m not going to let them stop me from doing what this Government has got a mandate to do, and that is to grow the economy, to make working people better off.”
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