Reeves seeks to reassure City as markets slide again over US tariffs

Rachel Reeves sought to reassure the City on Wednesday morning as stocks continued to slide following Donald Trump’s imposition of sweeping tariffs.

The Chancellor told top City executives at a breakfast meeting she was committed to reducing barriers to trade and securing a deal with the US as she pushed Britain as an attractive investment location.

Ms Reeves and City minister Emma Reynolds had talked up the UK’s “stable political climate” and the Government’s reforms to capital markets and “commitment to bolstering the UK’s retail investment culture”, a Treasury spokesperson said.

The meeting came as the import taxes announced by the US president last week came into effect, including a 10% levy on all goods from the UK along with a 25% charge on cars and other taxes on steel and aluminium.

Following the imposition of the tariffs, and a new 104% levy on some Chinese imports, the FTSE 100 fell again, wiping out most of Tuesday’s gains.

Meanwhile, yields on long-dated government bonds surged to their highest point since 1998 as investors anticipated faster interest rate cuts from the Bank of England, raising the cost of government borrowing.

The Bank itself warned on Wednesday that risks to the stability of the world financial system had increased because of the imposition of US tariffs, but added that UK households and businesses remained resilient.

Amid the ongoing market turmoil and uncertainty about global trading relations, Ms Reeves has said the UK is “accelerating trade deals with the rest of the world” as she prepares to meet her Indian counterpart.

She will meet Nirmala Sitharaman alongside Trade Secretary Jonathan Reynolds later on Wednesday for talks aimed at securing a deal with India.

The UK has been through more than a dozen rounds of talks since 2022 over a potential agreement with India, which is forecast to become the world’s third largest economy.

Key sticking points were said to include visa rules for Indian students and professionals, as well as access for British service firms.

Meanwhile, ministers still hope an economic agreement with Washington can be reached to soften the blow of Mr Trump’s tariffs.

Ms Reeves told the Financial Times on Wednesday that she would seek to negotiate such an agreement when she visits Washington at the end of April for the International Monetary Fund’s spring meeting of global finance ministers.

She also talked up Universal’s decision to build a theme park in Bedfordshire as a sign of “the enduring relationship between the UK and the United States of America”.

Discussion of a deal with the US has raised concerns about what concessions the Government might make in order to secure an agreement.

Earlier in the week, the Prime Minister told MPs he would be “very protective” of the NHS and was “very clear” that a digital tax on big tech firms should remain in place.

Meanwhile, Conservative leader Kemi Badenoch told reporters on Wednesday the Government should “look at mutual gain”, adding trade deals were “not about tit for tat giving things away”.

She said: “This is what Keir Starmer needs to do. My worry is that he can sign a trade deal that just gets us back to where we were last week. What we actually need is a trade deal that is going to be for the future, not the past.”