The Chancellor has held talks with the Bank of England on Tuesday after Donald Trump’s tariffs war has led to trillions being lost on global stock markets.
Rachel Reeves asked the Bank of England governor Andrew Bailey how the stock market is, he told the Chancellor the banking system remains “resilient” and the “markets are functioning effectively.”
The Chancellor told MPs during Treasury questions, “The United States’ decision to impose tariffs has had and will continue to have huge implications for the world economy.
“These implications have been reflected in the reaction that we have seen in global markets in recent days which the financial authorities have, of course, been monitoring closely.
“This morning, I spoke to the Governor of the Bank of England who has confirmed that markets are functioning effectively and that our banking system is resilient.
“I know too that this is an anxious time for families who are worried about the cost of living. We have your backs.
“We have your backs. And British businesses who are worried about what a changing world will mean for them, we have your backs too.”
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Reeves added, “This Government is clear-eyed that our response to global change cannot be to watch and wait – but instead to act decisively, to take the right decisions that are in our national interest and protect working people.
“All of the decisions that we make as a government will be underpinned by the stability of our non-negotiable fiscal rules.
“A trade war is in nobody’s interest. It is why we must remain pragmatic, cool-headed and pursue the best deal with the United States that is in our national interest.
“This remains our priority – and that was part of the discussion that I had with US Treasury Secretary Scott Bessent last week. We have been that clear nothing is off the table.”
The Shadow Chancellor Mel Stride told Reeves the Conservatives will help to “assist” Labour with attempting to lower the US tariffs.
Stride told MPs, “This is a time of great concern for millions of people up and down our country, for businesses, and – as an open-trading nation – for our economy at large.
“Free trade has been the bedrock of prosperity for our country and many countries around the world for decades. It has raised billions out of poverty.
“Tariffs are the enemy of free trade, and we on this side of the House will do whatever we can to assist the Government in getting those tariffs down.
“Having said that, of course, we will never cease becoming an effective Opposition, vigorously holding them to account – not least on the disastrous decisions that they have taken already in respect of our economy,” Stride jabbed. “But we will be responsible when it comes to these matters, particularly where market sensitivities are engaged.”
