Chancellor Rachel Reeves has weathered the immediate political storm following her controversial 2025 Budget, surviving calls for her resignation despite facing accusations of misleading the public and the financial markets. The Labour chancellor, labelled 'hapless' and 'desperately unpopular' by critics, is now expected to remain in post for the foreseeable future, bolstered by support from the Prime Minister and an unlikely ally: the City of London.
A Trio of Political Attacks
The chancellor is confronting a fierce three-pronged assault from opposition parties. The Conservatives have demanded a Financial Conduct Authority investigation, alleging she misled the markets. Meanwhile, the Liberal Democrats are pushing for her to be hauled before the House of Commons to explain her actions, and Reform UK has called on the Whitehall ethics tsar, Sir Laurie Magnus, to subject her to intense scrutiny.
This barrage of criticism stems from the dramatic run-up to her Budget speech, where Reeves painted a dire picture of the nation's finances, warning of a crisis and hinting at significant tax rises. This set the stage for a Budget that ultimately included a hike in employers' national insurance and other revenue-raising measures.
The Crucial Defence and the 'Inconvenient Truth'
Ordinarily, such a confluence of pressure might spell the end for a minister. However, two key factors have intervened. Firstly, Prime Minister Sir Keir Starmer has firmly leapt to her defence. Political analysts suggest his support is essential; if Reeves were to fall, the prime minister himself would be directly exposed to the fallout over the Budget's presentation.
Secondly, and perhaps decisively, the controversy revolves around the past, while the financial markets are focused on the future. The release of correspondence between the Treasury and the Office for Budget Responsibility (OBR) revealed the OBR's forecasts were more optimistic than the chancellor's public warnings suggested. Critics argue this allowed her to frame tax rises as a necessary bitter pill, only to impose them on areas not explicitly protected in the Labour manifesto.
Survival Amidst Stained Reputation
While Reeves may have been legally careful with her words—being 'economical with the actualité' rather than technically lying—the perception of dishonesty remains a significant problem for both her and Starmer. Their personal approval ratings are low, and they struggle to communicate effectively with the public.
Yet, the chancellor has proven a tenacious survivor. Crucially, the financial markets have responded positively to the Budget's content, seeing a UK economic outlook that is less catastrophic than previously feared. This approval from the City provides a powerful shield against her political detractors. For now, despite the stain on her reputation, Rachel Reeves appears difficult to dislodge, securing her position as chancellor for the time being.
