Has the spring statement helped Rachel Reeves to keep her job as chancellor?

In a rare outcome for one of her set-piece occasions, Rachel Reeves’ intentionally low-key spring statement went off relatively well. The Office for Budget Responsibility’s forecasts weren’t accidentally leaked in advance; there were no misleading pre-event announcements; no “fiscal headroom” shocks; and, for a change, no nasty tax hikes. The chancellor must be hoping that this “fiscal event” marks a turning point in her career as well as Britain’s faltering economy.

Mixed, but encouraging – in the context of what’s happened since she took over from Jeremy Hunt in July 2024, seemingly a lifetime ago. The UK growth forecast for 2026 is down a little, to 1.1 per cent, and thus vulnerable to an external shock; it would not take much to nudge the economy back into recession territory, or even stagflation, if depressed output is accompanied by inflation from higher energy costs and global uncertainty.

Apart from anything else, that makes the job of meeting her fiscal targets more difficult, raising tricky questions about yet more tax hikes or spending cuts.

Quite easily. Reeves’s statement and the OBR’s figures are all essentially pre-war, and renewed instability in the Middle East will inevitably impact living standards. Oil and gas prices are sharply higher, stock markets are down, and the global prospects for investment, unemployment, inflation, and interest rates are poor. Reeves can’t be blamed for any of that, but such developments will inevitably make her job more difficult, and, fairly or not, she will have to deal with the consequences.

The big picture remains fragile, and modest growth forecasts undermine confidence in her ability to keep spending and borrowing under control, and taxes low enough to be politically acceptable (arguably that point has passed). Notable medium-term pressures include defence spending, SEND obligations and public sector pay. A high-tax, low-growth “doom loop” is the main threat to keeping her job.

Reeves was chirpy and put on a more fluent and confident Commons performance than she usually manages. Shadow chancellor Mel Stride didn’t really get into his stride, and Reeves comprehensively demolished both the Lib Dem and Reform Treasury spokespersons Daisy Cooper and Robert Jenrick. It was their turn to be (metaphorically) left in tears.

Her fortunes have been tightly bound with Keir Starmer’s since things started to go badly wrong for the pair in her first Budget almost two years ago. They’re both now weak and if Starmer were to fire or reshuffle her, his many critics might ask why he is still in Downing Street.

Despite signs of improvement, Reeves remains a dire communicator who still lacks base political nous. She is also yet to live down raising the wrong taxes at the wrong times in the wrong way, welfare reform fiascos and too many U-turns. For as long as Starmer survives, she’s in post; but she’d not survive a change of Labour leadership. Once considered a leadership contender herself, she’s got no following in the party, is deeply unloved by the public and is surrounded by far too many colleagues who think they, or someone else, could do a better job.

However, Labour chancellors have lasted longer than most – notably Gordon Brown (10 years) and Denis Healey (more than five years) and tend not to get the sack. She might just last the distance, deservedly or not.