Reeves shrugs off calls for resignation as she promises growth plan

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Chancellor Rachel Reeves has shrugged off calls for her resignation, insisting to MPs that her economic plans can deliver an “immense” prize and defending her visit to China last week.

In her first House of Commons appearance since market turmoil hit her economic plans last week, Reeves was accused by her opposite number Mel Stride as being part of a “Shakespearean tragedy”.

Stride said: “To go, or not to go, is now a question.” But Reeves, cheered on by Labour MPs, said she would in the coming weeks set out more details of a plan to revive a stagnating economy.

“If we get it right, the prize on offer to the British public is immense,” she said. Reeves claimed the recent bond market turmoil affecting UK borrowing reflected “global economic uncertainty”.

Stride claimed Reeves should have stayed in Britain to reassure the markets instead of going to China “with a begging bowl”. Reeves said building business ties with Beijing was essential.

“Not engaging is not an option,” she said, although Reeves added that she had raised questions of human rights with the Chinese leaders and denounced “completely unfounded sanctions on British parliamentarians”.

The chancellor has come under increasing pressure to set out a plan to turn around the economy.

UK borrowing costs have hit a 16-year high amid growing investor fears of stagflation, which combines anaemic growth and persistent price pressures.

The strains in the UK market come amid a global sell-off in government bonds in recent weeks, fuelled in part by fears that US president-elect Donald Trump’s proposed tariffs will be inflationary.

The gilts market was stable following the chancellor’s initial remarks, with the 10-year yield flat on the day at 4.88 per cent, and well below last week’s post-financial crisis high of 4.93 per cent.

Reeves’ statement came amid growing unrest among Labour MPs about the chancellor’s handling of the economy, with many still deeply unhappy about her decision last year to scrap winter fuel payments for 10mn pensioners.

On Monday Number 10 took the unusual step of announcing that Starmer expected Reeves to continue in the role until the election, just hours after the prime minister refused to give such an assurance.

One newly elected Labour MP said: “Some people are looking at the polls and worrying about their seats. There’s a danger Rachel Reeves becomes a lightning rod for what has been going wrong, but I don’t think we’re at that stage yet.”

This is a developing story