Pound falls despite Starmer's reassurances over Reeves's future
Sterling dropped nearly 1pc on Wednesday and government borrowing costs surged after the Chancellor shed tears in the Commons and the Prime Minister failed to back her when questioned at the depatch box.
He later backed her but the pound and gilt yields – the return the government promises to buyers of its debt – failed to recover from one of the sharpest moves since the Liz Truss mini-Budget crisis.
Mohamed El-Erian, chief economic adviser at Allianz, said: 'The concern in markets is that a new chancellor may not be as committed to the fiscal rules.'
In early trading, the pound was last down around 0.1pc against the dollar at $1.364 and was 0.2pc lower versus the euro, which was worth 86.5p.
Asked about Ms Reeves's emotional state on Wednesday, Sir Keir Starmer told the BBC: 'It was a personal matter for the Chancellor and I've been absolutely clear with you it has got nothing to do with politics, nothing to do with any discussion between me and Rachel, nothing to do with the matters of this week.
'She will be the Chancellor for a very long time to come. She is going to be the chancellor into the next election and for many years afterwards.'
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