Reeves Rearguard Holds — Bond Markets “Biggest Fear Is Miliband”
Chancellor Rachel Reeves’s backbench-lobbying push continues today. Friends of Reeves believe there is a world in which she survives the transition to a Burnham premiership precisely because it would reassure the markets. One Labour MP close to the chancellor said: “The biggest fear for the bond markets and the unions is Ed Miliband. I am concerned that we may lose everything if a new leader sacrifices the chancellor for promises and new alliances they are currently forging with MPs who fancy the job for themselves.” Burnham’s allies have suggested Energy Secretary Ed Miliband as his pick for chancellor; Reeves’s allies counter that Miliband “would not be trusted by the bond markets”.
The Reeves cost-of-living package — the cancellation of the 5p fuel-duty rise (frozen until 31 December 2026), free bus travel for children over the summer holiday, a VAT reduction from 20% to 5% on summer attraction tickets, VAT cut on children’s meals, £350 million critical chemicals resilience fund, £120 million ceramics support, and removal of import tariffs from 100 food items — lands into a measurably easier macro backdrop. Inflation has slowed to 2.8% — the lowest level in over a year. The Bank of England is widely expected to keep interest rates on a downward path. The 10-year gilt yield at 5.02% is well off the 5.18% peak Friday week. Reeves’s allies argue the chancellor question is now “almost as important as that for prime minister”.