The Chancellor has come under fire as Cabinet colleagues have accused Rachel Reeves of “losing the plot” as she has asked fellow Ministers to come up with ideas to reverse the economic concerns.
Reeves has asked colleagues to come up with ideas to boost growth as the Chancellor is on course to damage her fiscal rules.
The Chancellor is planning to make a “significant speech” in an attempt to reassure investors and boost growth.
Cabinet colleagues told the Times that Reeves has “lost the plot” which has left Labour worried that the current market situation will derail what credibility she has left.
The current economic situation has been compared to Denis Healy’s predicament during the 1976 IMF crisis which saw Britain go cap in hand begging for a $3.9 billion bailout.
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We are potentially looking at a ‘stagflationary environment or a recessionary environment’
Nigel Green, CEO of deVere Group warned on Thursday, the UK’s economic turmoil has taken a perilous turn, with markets bracing for what could rival the 1976 IMF bailout crisis.
The pound is “in freefall” the UK’s finances are crumbling; bond yields are surging and Reeves’ fragile £9.9 billion fiscal buffer could be obliterated well before her official fiscal update on March 26.
Reform UK MP Richard Tice gave a warning to Parliament, “We are heading towards, be under no illusion, a financial crisis.”
Online trader Kathleen Brooks has warned that the economy is now in a “perilous” position.
Brooks told The Times, “The chancellor is expected to make a speech in the coming days, where she may focus on public sector spending cuts rather than further tax increases to meet her fiscal rules.
“However, the rhetoric from the Labour government is one reason we are in this mess in the first place, and there are no guarantees that Reeves will be able to calm the market.”
Shadow Chancellor Mel Stride led fierce criticism of Reeves, he said, “Where is the Chancellor? It is a bitter regret that at this difficult time with these serious issues she herself is nowhere to be seen.”
Liberal Democrat leader Sir Ed Davey said, “Instead of jetting off to China, the Chancellor should urgently come before the House of Commons to cancel her counterproductive jobs tax and set out a real plan for growth.
“The country is paying an ever-higher price for the total mess the Conservative Party made of our economy, and the Chancellor needs to realise that she’ll never dig us out of this hole without a far more ambitious plan to grow our economy, including rebuilding trade with Europe.”
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