Rachel Reeves has said US tariffs will ‘continue to have huge implications’ before insisting the Bank of England believes the UK banking system is ‘resilient’.

The UK chancellor, in a message to families and businesses, said ‘we have your backs’ as she made a statement to the House of Commons at the beginning of Treasury questions on Tuesday.

London’s FTSE 100 share index rose in the first few minutes of trading on Tuesday, as a sense of optimism returned to the financial markets after several days of heavy losses.

The index, which tracks the UK’s top 100 listed companies, was up more than 1% shortly after markets opened on Tuesday.

It follows a more positive session for Asian markets, with some indexes making gains after suffering steep falls in previous days.

The next stage of US President Donald Trump’s tariff programme comes into force in the early hours of Wednesday, with import taxes at 20% for goods from EU nations and 24% from Japan.

The UK government is pushing for a deal with the White House in the hope of easing the 10% tariff on US imports of British goods, along with a 25% tariff on cars and separate import taxes for steel and aluminium.

Reeves told MPs: ‘The US’ decision to impose tariffs has had and will continue to have huge implications for the world economy.

‘These implications have been reflected in the reaction that we’ve seen in global markets in recent days, which the financial authorities have of course been monitoring closely.

‘This morning I spoke to the governor of the Bank of England, who has confirmed that markets are functioning effectively and that our banking system is resilient.

‘I know too that this is an anxious time for families who are worried about the cost of living – we have your backs.

‘And British businesses who are worried about what a changing world will mean for them – we have your backs too.

‘This government is clear-eyed that our response to global change cannot not be to watch and wait, but instead to act decisively, to take the right decisions that are in our national interest, protecting working people.

‘All of the decisions that we make as a government will be underpinned by the stability of our non-negotiable fiscal rules.

‘A trade war is in nobody’s interest, it is why we must remain pragmatic, cool-headed and pursue the best deal with the US that is in our national interest. This remains our priority.’

By Richard Wheeler, David Hughes and Anna Wise

Press Association: Finance

source: PA

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