I was amused to note the number of questions about Rachel Reeves's future that were thrown at government ministers and then at Keir Starmer yesterday.
Again and again her suitability for office was questioned, even by Ed Balls in his capacity as a morning television journalist.
Pat McFadden, possibly the most uninspiring person to ever be sent out by a political party to do the morning media around, assured Ed Balls and others that he could not see her leaving office as Chancellor before the autumn. Keir Starmer was even more emphatic. He assured the media that she enjoys his full support.
I think we should come to the inevitable conclusion from all this, which is that Rachel Reeves' demise as Chancellor is now a forgone conclusion and the only question left to resolve is when this might happen and not if this might happen.
My suspicion is that events will get the better of Reeves much sooner than she expects.
There will be a budget to present in October this year. Will she last until then? I do not gamble, but if I did, I would not put money on it.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
As I see it, Labour has put a lot of emphasis in a private sector led ‘recovery’ of the economy and the the much vaunted private sector does not want to come out and play.
The BoE have gone rentier-native and are obsessed with inflation ( just looking after the rentier economy) which will tend to shrink it, when Labour want growth. But also, Labour want to tax that growth in ways which also seem to work against the principles it says it believes in.
We know what needs to really happen – the money stimulus must come from government.
And the government has to start managing the BoE and remind them who is in charge. The BoE might have a big say in Reeves future if she does not execute her powers as a democratically elected politician.
When it comes to a choice between inflation or more unemployment, the bankers will always go for unemployment.
We now have a government which is working from the ‘Banker textbook.’
Are there any politicians who still use a Keynesian textbook?
Both of these comments are spot on.
Reeves took a delegation half way around the world to China to seek inward investment, because one way to grow the UK economy is to bring in funding from overseas that the public and private sectors in the UK refuse to provide. Not least, it is one component of the sectoral a balances.
Reportedly she came away with a promise of £600m, over 5 years. So about £120m per year, which is about £2 per UK person per year.
And the total UK foreign direct inward investment is over £2 trillion. That is £2,000 billion or £2,000,000 millions. It increased by £127 billion in 2022 compared to 2021. Billion not million. The new investment is a thousandth of the change that year – 0.1%.
While every little helps, the new promise of Chinese investment is is not even statistical noise. It is embarrassingly tiny.
https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/foreigndirectinvestmentinvolvingukcompanies/2022
That fiugure is 1/300,000 of total UK capital stock. I agree with you.
Musk spend just about half of the amount in one month supporting the election of Trump.
I think after the May local elections is my guess
Starmer will need a sacraficial lamb after a complete rout of labour councils
Assuming the May local elections take place. A lot of Conservative-controlled councils are asking for the elections to be delayed so they can concentrate on LG reform!
I fear that is going to be true.
LG reform = ??????
Local governmemt
I still think there is a delusional arrogance in that this one wants to be PM and has set in motion events to undercut Starmer and push him out. Then will present herself as the only viable replacement option to a bunch of weak neoliberal Labourites placed in govt by Starmer.
Starmer should sack her right now but which neoliberal incompetent is he to replace her with. So he sticks with her as the patsy for his? agenda, or someone’s agenda anyhow.
By the time both are gone a lot of the neoliberal agenda will be in place. Depressing, but hope is eternal and possibly some labour people will rally enough support to attempt a better hash of things.
“the full confidence of the PM”
Oh dear!
That bad huh?
Ms Reeves goes in say June.
Result? Instant “financial crisis” manufactured by the media, Tufton Street groups.
Panic in the Labour leadership. Whoever is the new Chancellor will impose new fiscal rules, is very unlikely to tell the Bank of England drop the base rate, stop the tightening, but regrettably we must continue with austerity.
Do not expect any throwing out of the current economic policy.
Cynical? Absolutely.
Darren Jones?
Torsten Bell?
Who else? No one in the current cabinet. Neither of them would change much.
Would Miatta Fahnbulleh(? spelling) be up to it?
I have only met her once and was not alone in being underwhelmed by her macroeconomic knowledge. The New Economics Foundation is very micro focussed, usually, and I think she has been. So I am not confident.