At a breakfast sponsored by JP Morgan, the grandest of the US investment banks, she sounded a marked contrast with the Tories’ squandered record for stability. The political markets were all in on Reeves. Preparing the ground in lunches with investors and visits to hedge-funder offices had spelled reassurance.
It is true that finance ministers live dangerously these days. Bond traders often do annoying things to governments, and at the moment, reflecting a general worry that wealthier nations will end up having to borrow in the next 20 or so years without the gains of automation and AI offsetting excessive reliance on debt, the free trade outlook is more fraught than it was.
So after a trip to China to signal an essentially open market for Beijing, in allowing a lot of its electric vehicles to be imported without EU-style tariffs, she will appear at the Swiss grandee think-in and shoulder-rub next Tuesday on a reassurance mission. At this year’s Davos she will intend to show that her basic maths of keeping down income tax and VAT, and either hitting spending commitments or being prepared to water some down, will steady things.
She sought to present herself as the “woman who knew”, to adapt the saying about the veteran ex-US Federal Reserve chairman Alan Greenspan, who was lionised in finance circles for steering America’s economic course under a succession of presidents and dealing with the financial crisis. But the Budget, as one senior City figure put it to me, “did not really reflect what she’s heard about how much change the UK economy needed to find its place between the US, China and an ailing Europe”. Today, Reevesianism looks more like a succession of things to do than a coherent whole.
But like it or not, the job is also about projecting confidence and determination, and building a team around her both ministerially and in person who can support her best when the water gets hot.
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Read MoreWhether in China or the Alps, Parliament or the endless City banquets chancellors have to endure, they are part of the shop window of the UK. That also means they need something to sell.
The bigger problem, however, is that the recipe for home-based growth looks so threadbare. We’ve seen under-ambitious education policy, the PM speechifying about AI – which felt a bit unconnected to a clearer sense of how the next two years or so would work out – and a vague realisation dawning on Labour MPs and exploited by her opponents that growth will not be achieved by doing a raft of fairly traditional things it wanted to do anyway.
That prospect is a politically terrifying one for Starmer and Reeves, and it explains why they are throwing as many possible solutions at the problem as they can.
The markets may yet oblige the Chancellor, by doing their overactive thing and then calming down. The bigger problem persists – the UK brand and its Chancellor don’t look confident. And that is always punished: in the markets, in the polls and, ultimately, in the economy.
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