A cabinet minister has insisted ordinary people “shouldn’t be worried” about the state of the economy despite turmoil on the money markets and the falling value of the pound.
Culture secretary Lisa Nandy also defended under-fire chancellor Rachel Reeves’ decision to fly to China while the economy wobbles.
Government borrowing costs have hit their highest level in years, meaning ministers have less money to spend on frontline services and piling pressure on Reeves to either put up taxes again or slash public spending.
Meanwhile, the value of the pound - a key indicator of the financial markets’ confidence in the UK economy - has fallen to its lowest level in more than a year.
On Sky News this morning, presenter Anna Jones if people should be worried about the ongoing turmoil.
Nandy said: “I don’t think we should be worried. It’s obviously something we take very seriously, but these are global trends that have affected many countries, most notably the United States as well as the UK.
“We are still on track to be the fastest growing economy, according to the OECD, in Europe, and the chancellor and chief secretary to the Treasury have been absolutely clear that our fiscal rules are non-negotiable. We’re not going to borrow for day-to-day spending.”
The Tories called on Reeves to cancel her planned trip to China due to the problems facing the economy, but Nandy said she was right to go.
She said: “China is the second largest economy and what China does has the biggest impact on people from Stockton to Sunderland, right across the UK.
“It’s absolutely essential that we have a relationship with them. We need to make sure that the UK economy remains competitive. We need to challenge [China] where we must, including in the area of human rights, but we also need to make sure we’re working with China on those areas of shared interest.”
She added: “The idea that the chancellor can’t take action to stabilise the economy on the short-term, as we’ve been doing over the last six months, and get the economy on a long-term footing for growth, is just nonsense. That’s the failed model that the Tories bequeathed us.”