Rachel Reeves has told anxious families “we have your backs” after Donald Trump’s tariffs sparked fears of a global recession.
The chancellor said she has spoken to the governor of the Bank of England Andrew Bailey this morning and he has confirmed that UK markets “are functioning effectively and that our banking system is resilient”.
However, she said the US president’s actions “will continue to have huge implications for the world’s economy”.
Speaking in the Commons, Ms Reeves added: “I know that this is an anxious time for families who are worried about the cost of living.
“We have your backs. And British businesses who are worried about what a changing world will mean for them. We have your backs too.”
So far Mr Trump has imposed a series of tariffs of varying severity on countries across the world, including a 10% baseline tax on imports from all nations and a 25% levy on all cars imported to the US.
His actions have sparked fears of a global trade war, with the UK’s benchmark stock market index, the FTSE 100, only just witnessing a slight rise this morning after three days of steep losses.
Ms Reeves said the government would not “watch and wait”, citing Sir Keir Starmer’s decision to relax rules around electric vehicles to help car manufacturers.
She said the government is still focused on securing a trade deal with the US and she discussed this with her counterpart in Washington, Treasury Secretary Scott Bessent, last week.
Pressed for details by shadow chancellor Mel Stride, Ms Reeves said the focus of the discussions is on reducing tariff and non-tariff barriers to trade, “with a particular focus on those sectors that are subject to the higher tariffs”.
“Although the 10% tariffs are lower than many other countries around the world, and we welcome that, the additional tariffs on cars, on steel and potentially on life sciences pose a real challenge to our country because those are some of our biggest export markets.”
Please refresh the page for the fullest version.
You can receive Breaking News alerts on a smartphone or tablet via the Sky News App. You can also follow @SkyNews on X or subscribe to our YouTube channel to keep up with the latest news.