{"id":1544888,"date":"2025-07-02T12:59:42","date_gmt":"2025-07-02T16:59:42","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1544888"},"modified":"2025-07-02T12:59:42","modified_gmt":"2025-07-02T16:59:42","slug":"teary-uk-chancellor-reeves-is-safe-for-now-but-the-gilt-market-maybe-not","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/teary-uk-chancellor-reeves-is-safe-for-now-but-the-gilt-market-maybe-not\/1544888\/","title":{"rendered":"‘Teary’ UK Chancellor Reeves Is Safe For Now But The Gilt Market Maybe Not"},"content":{"rendered":"

‘Teary’ UK Chancellor Reeves Is Safe For Now But The Gilt Market Maybe Not<\/span><\/p>\n

\n

Ten-year gilt yields just spiked by more than 10 bps on rumors that UK Chancellor Rachel Reeves was about to resign or be ousted.<\/strong><\/p>\n

<\/a><\/p>\n

The pressure on Reeves comes after Starmer \u2014 in a dramatic climbdown on Tuesday \u2014 abandoned controversial plans to restrict benefit payments to some disabled people<\/strong>, a reform pushed by the chancellor which would have saved some \u00a35 billion ($6.9 billion), and was key to meeting her self-imposed budgetary rules at her spring statement in March.<\/p>\n

Bloomberg reports that the welfare reform package was widely opposed by Labour MPs, with more than 120 originally threatening to vote against the policy in parliament.<\/p>\n

Even after the last-ditch decision to drop the most contentious changes, 49 Labour MPs still voted against the bill on Tuesday, a sign of the scale of discontent.<\/p>\n

The rebellion and U-turn are a serious blow to Starmer\u2019s political authority as he approaches the first anniversary of Labour\u2019s election win last July. <\/strong><\/p>\n

The decision to ditch the welfare reforms also leaves Reeves facing a widening fiscal hole of more than \u00a36 billion to fill, including the need to fund a separate about-turn on a plan to cut winter fuel payments to pensioners.<\/p>\n

As Bloomberg further reports, Starmer\u2019s press secretary, Sophie Nazemi, quickly clarified his position to reporters after PMQs, saying that Reeves was going nowhere.<\/p>\n

\u201cShe has the prime minister\u2019s full backing,\u201d<\/strong><\/em> Nazemi said.<\/p>\n

\u201cHe\u2019s said it repeatedly.\u201d<\/em><\/p>\n

The combination of Starmer\u2019s failure to back his chancellor, and Reeves\u2019 tears, prompted speculation about her position until the Treasury clarified that the reason for her demeanor was a personal issue.<\/p>\n

<\/a><\/p>\n

\u201cIt\u2019s a personal matter, which – as you would expect – we are not going to get into,\u201d <\/strong>the Treasury said in a statement.<\/em><\/p>\n

\u201cThe chancellor will be working out of Downing Street this afternoon.\u201d<\/em><\/p>\n

A tear just rolled down the Chancellor\u2019s cheek at #PMQs<\/a> as the PM refuses to answer whether or not she\u2019ll stay in her job.<\/p>\n

Hayfever, or something else? pic.twitter.com\/HPXXQlDNo9<\/a><\/p>\n

\u2014 Paul Brand (@PaulBrandITV) July 2, 2025<\/a><\/p>\n

But, as Bloomberg’s Simon White notes, the rapidity of the move shows the precariousness of the UK\u2019s debt situation. <\/strong><\/p>\n

The government had planned a series of cuts to welfare and sickness benefits, but had to drastically scale them back in the face of huge opposition from backbench MPs.<\/p>\n

The watered down changes are estimated to deliver no savings overall.<\/p>\n

A new chancellor might drop Reeves\u2019 commitment to not borrow more for day-to-day activities, or increase spending, justifying a deepening concern for the gilt market.<\/strong><\/p>\n

Cable tumbled…<\/p>\n

<\/a><\/p>\n

Yields are still near their day\u2019s highs, while a risk measure for the UK, based on asset swaps, country bond spreads and basis swaps, has widened notably.<\/strong><\/p>\n

<\/a><\/p>\n

Keep watching.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 07\/02\/2025 – 08:59<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/teary-uk-chancellor-reeves-safe-now-gilt-market-maybe-not<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

‘Teary’ UK Chancellor Reeves Is Safe For Now But The Gilt Market Maybe Not Ten-year gilt yields just spiked by more than 10 bps on…<\/p>\n","protected":false},"author":0,"featured_media":1544889,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1544888","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1544888","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1544888"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1544888\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1544889"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1544888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1544888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1544888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}