Reeves: My work is beginning to bear fruit
Rachel Reeves is then left briefly speechless, after being asked what advice she might give to anyone in the future taking on the role as chancellor.
The chancellor then replies:
I’m not sure if anyone wants my advice.
But Reeves then rallies, insisting again that she is ‘really proud’ of her achievements as chancellor.
She tells the BCC’s annual conference:
My advice would be you’ve got a brilliant set of officials at the Treasury who will back to you if you’re clear about what you want to do.
I’ve been very clear about what I wanted to achieve as chancellor. I wanted to restore stability to the economy. I wanted to boost investment, both public and private, into the economy. And I wanted to change how the economy works, with a regulatory burden that is fairer and more efficient, with a planning system that actually allows things to get built in our country.
I’m really proud of my record, and I hope that whoever is Chancellor, in the future, whenever that future may be, sticks to what I’m doing because it is beginning to bear fruit. And we are seeing that investment return to the economy, that growth to come to the economy and crucially, that stability, so that businesses can plan and invest in.
Q: How would you like the history books to remember you?
Reeves reminds the BCC that in her first speech as chancellor, she said her time in office would be a success if ordinary children from working class backgrounds had more opportunities than when I became chancellor, and if women and girls felt that there should be no ceiling on their ambition.
She concludes:
It’ll be up to others to judge whether I’ve achieved my goals. But I’m very proud of what I’ve done and believe I have [hit those goals].
Key events
The recent local council elections, and those in Scotland and Wales, shows that Labour needs to do more to to connect to the country, to tell a better story of what we’ve done in government, and set out a vision for the future, Rachel Reeves concedes.
Conceding that she might be moving on from the Treasury soon, Reeves says:
That is what Andy [Burnham] will be able to provide as our next Prime Minister. He is a great communicator. He’s got a great track record in delivering in Manchester, and I have no doubt that he will bring that to the position of prime minister.
And and I look forward to working with him in whatever capacity.
Reeves: Middle East conflict will hit growth this year
Rachel Reeves then warns that British Chambers of Commerce’s annual conference that the UK will slow this year, after a robust start.
The chancellor reminds the BCC that the economy grew by 0.6% in the first quarter of this year.
If that continued through the year, we’d have 2.4% growth, which Reeves says would be an exemplary level of growth for a G7 economy.
But, she warns, the Middle East crisis means growth through the rest of 2026 will be slowed.
Reeves says:
Are we going to maintain that? No, because of the conflict in the Middle East.
It’s not a conflict that we started. It’s not a conflict we entered.
I think I’ve been pretty clear on and off the record about my views of that, conflict.
It has implications here and at home, which is why I set that target of the fastest growing economy in the G7 as a relative target, because all countries are exposed to shocks.
[Reeves has certainly been clear; she shook up the IMF’s spring meeting in April that Donald Trump’s war on Iran was a “mistake”]
And a reminder: The economy did shrink slightly in April, by 0.1%.
Q: Some people are backing Andy Burnham because they think he’ll rip up your fiscal rules…
Reeves replies that Burnham has been “really explicit” that he backs those fiscal rules [they dictate that day to day spending is funded through tax receipts, and that debt falls as a share of the economy].
Reeves: I’m proud of my record
Sophy Ridge focuses on Rachel Reeves’s future:
Q: Do you feel you have unfinished business as Chancellor?
Reeves tells the BCC’s conference that she ‘s “really proud” of her record on inflation, on interest rates, on economic growth, on rising real wages, and on borrowing (she says government borrowing is now below 5% of GDP, at 4.2%)
Reeves adds that her changes to the fiscal rules have allowed investment in the Sizewell C new nuclear power station, in small modular nuclear reactors in Anglesey, carbon capture and storage in Merseyside and in Teesside.
She also cites transport expansion – at Heathrow and Gatwick, in Northern Powerhouse Rail, the TransPennine route upgrade, andthe Oxford Cambridge Growth Corridor.
Another achievement: lifting more than half a million children out of poverty in this Parliament.
Reeves repeats that she is proud of her record, but adds that there is more to do.
So yes, there is more to do, but all of that has to be anchored around that stability, that high return to the economy.
She also cites “unfinished business on fiscal devolution”.
Q: Do you want to stay on as chancellor?
Reeves says that’s a choice for Andy Burnham; she’s not going to pre-empt those decisions about his top team.
Reeves: Tight grip on public finances would continue under Burnham
Chancellor Rachel Reeves is speaking at the British Chambers of Commerce (BCC) conference in London now, hours after telling the BBC that she is backing Andy Burnham to be the next prime minister.
Sky News’s Sophy Ridge begins by asking Reeves if she is taking businesses’ need for stability seriously.
Reeves, who concedes it’s been a slightly busier week than normal, says she’s proud of her record at the Treasury – citing six cuts in interest rates in the last two years, the fall in inflation in April, and that the UK had the fastest growing economy in the first quarter of this year.
The chancellor adds that it’s a good thing that Andy Burnham has been “really clear” that he is committed to the fiscal rules she introduced.
Reeves says:
Businesses here can be confident that that stability, that rigour to policymaking, that tight grip on the public finances, which is essential for getting inflation and interest rates down, will be continued.
Reuters: Iraq has considered leaving Opec in push for higher quota
Could Iraq be poised to follow the United Arab Emirates out of Opec?
Reuters is reporting that Iraqi officials had considered leaving the Opec oil cartel, but are currently planning to remain a member and seek a higher quota under Opec rules.
They report:
Iraq will be compelled to consider all available options if its OPEC quota is not significantly increased, a senior Iraqi oil ministry official told Reuters on Thursday.
Iraq is enduring a critical financial crisis on the back of the Iran war and a significant increase in its OPEC quota is a must and should be treated with utmost seriousness, the source told Reuters.
Two months ago, the UAE rocked Opec by quitting the group after 60 years of membership, amid the biggest supply crisis in history.
Opec members agree fixed production limits, to control the oil price; they control about 80% of the world’s proven oil reserves but produce only 40% of global crude to help keep market prices at a level that can support the petrostate economies.
Chart: the rise and fall of Brent crude
Oil has been on quite a journey this year.
On 27 February, just before the Iran war started, Brent crude closed at $72.48 a barrel. It surged once the conflict began – hitting $119/barrel several times in March, and then peaking at $126.41 at the end of April.
But it then fell through May and June – as hopes of a peace deal rose.
Stocks surge in Japan and South Korea
Asia-Pacific stock markets have jumped today, amid relief that the oil price has fallen to its pre-Iran war levels.
Japan’s Nikkei has surged by 4.6%, while South Korea’s KOSPI is up over 6%.
Jim Reid, market strategist at Deutsche Bank, says:
Markets are in a buoyant mood this morning, with Brent crude oil prices finally back at their pre-conflict levels.
It comes as flows through the strait of Hormuz have continued to ramp up, with the number of vessels getting through at its highest since the conflict started. And more broadly, the oil price decline has eased fears about a stagflationary shock and aggressive rate hikes to deal with any inflation.
Traders are also relieved that chip giant Micron reported a surge in quarterly profits last night, easing fears that the AI boom might falter.
Chancellor Rachel Reeves, who is widely predicted to be replaced if Andy Burnham becomes prime minister, is due to speak at the BCC’s conference today.
Several other senior political figures are also due to speak…. as is Andy Haldane, the former Bank of England chief economist who has reportedly been advising Andy Burnham.
Here’s the latest agenda:
Businesses urge next PM to ease burden on firms to drive growth
UK firms have been through a torrid decade – first the Brexit vote, then Covid-19, and then the twin energy shocks from the Ukraine and Iranian wars.
And with a new prime minister soon to take office, business leaders are hoping they will resist the temptation to pile costs on business.
Shevaun Haviland, Director General of the British Chambers of Commerce (BCC) will warn today that the next PM – likely to be Andy Burnham – should try to lift business confidence to achieve higher growth, not stifle it.
Haviland will tell the BCC’s Global Annual Conference today that a lack of confidence is hurting the economy, explaining:
“Weak confidence reduces appetite for risk, which reduces investment, which hampers growth, which knocks confidence further.
“And this circular crisis of confidence is now shackling ambition. Blocking the actions needed to invest, innovate and trade.
“And whoever sits in No10, or the Treasury, needs to understand that.
“Businesses can only deliver growth, if the environment they operate in gives them the confidence to act. And that is where political leadership can make all the difference.”
Introduction: Oil price back below pre-Iran war levels
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Fears that the world could soon face an over-supply of oil have pushed crude prices below their levels before the Iran war.
The price of a barrel of Brent crude has fallen as low as $72.24 today, slightly lower than the day before the Iran war began.
Oil prices have been sliding since the US and Iran finally began peace talks, bolstering hopes of a lasting agreement to end the conflict and encouraging more oil tankers to pass through the strait of Hormuz.
According to CNN last night, MarineTraffic data shows vessel traffic in the strait of Hormuz doubled over the previous 24 hours to its highest level since late February.
News that vessels are now transiting the strait of Hormuz with their satellite signals switched on helped push down the oil price, reports Ipek Ozkardeskaya, senior analyst at Swissquote, adding:
A combination of strategic inventory releases, a collapse in demand from top buyer China and a substantial number of tankers quietly leaving the Persian Gulf “dark” had contributed to a small oversupply in some key markets, according to traders interviewed by Bloomberg.
The agenda
-
9am BST onwards: British Chambers of Commerce global annual conference
-
9am BST: ECB’s Bulletin
-
1.30pm BST: US PCE inflation index for May
