Reeves says if economy ain't broke, don't fix it' - as fight to keep her job goes on

"The message from Rachel Reeves is clear. After Britain's economy defied the predictions for a slump in March, despite the fallout from the Iran war, why put things at risk with a roll of the dice in domestic politics? Responding to bumper growth of 0.3% in March much stronger than City economists' forecasts for a 0.2% contraction the chancellor said the figures showed she had the right economic plan, in a comment laced with subtext."

"Over the first three months of 2026, the economy grew by 0.6%, up sharply from growth of 0.1% in the final three months of last year. At that pace Britain is now the fastest growing economy in the G7. Now is not the time to put our economic stability at risk. To do so would leave families and business worse off. Instead, this government is getting on with the job of building an economy that is stronger, more resilient, and prepared for the future, Reeves said."

"The fighting talk could easily be directed at Labour's external critics. After Keir Starmer's two years in power, the government has struggled to show much progress on its top priority of growing the economy. However, the message also works for an internal audience. On another dramatic day in Westminster, as Wes Streeting and Angela Rayner prepare leadership bids, the undertone is none too subtle: if it ain't broke, why fix it?"

"For Reeves, the progress in the first quarter could bolster her case to remain as chancellor with whoever occupies No 10 after the dust settles on Labour infighting. The talk among City bond traders reflects this, in the anticipation that Reeves's reputation for fiscal prudence could help to calm a storm in the gilt market. However, despite a bumper first quarter, the pressure on Reeves and Labour is unlikely to abate."

Britain’s economy grew 0.3% in March, outperforming forecasts that predicted a 0.2% contraction despite fallout from the Iran war. Growth over the first three months of 2026 rose to 0.6%, compared with 0.1% in the final three months of the previous year. At this pace, Britain is described as the fastest growing economy in the G7. The chancellor frames the results as evidence of the right economic plan and warns against putting stability at risk through domestic political gambles. The message is aimed at external critics and internal leadership contests, while bond traders anticipate fiscal prudence could help calm gilt-market concerns. Pressure remains because past strong first quarters often fade later in the year, with expectations of weaker second-half performance.

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