The Rachel papers: Chancellor's first year ends in tears instead of cheers

City confidence in her is rock bottom — and Rachel Reeves's high-wire act is just one misstep away from a full-blown financial crisis

- Jonathan Prynn

On Saturday Rachel Reeves will mark — “celebrate”, sadly, is the wrong word — the anniversary of her glass-ceiling-smashing appointment as the first ever female Chancellor of the Exchequer. There is unlikely to be much champagne flowing in the state room at 11 Downing Street.

Indeed judging by the tears that dramatically flowed in the Commons at Prime Minister's Question Time yesterday — the result of a “personal matter” according to her spokesman — Reeves could be forgiven for wishing she had never been offered the job.

When Keir Starmer failed to give his chancellor his full backing in the Commons the bond markets took fright, fearing she could be replaced by a successor more to the liking of the rebellious back benches. At one point the yield on 10-year government bonds surged by as much as 22 basis points to 4.68 per cent.

Possible replacements include Pat McFadden, Darren Jones, Jonathan Reynolds and Yvette Cooper although the PM later clarified that Reeves was “going nowhere” in words that soothed the markets.

It was all a deeply traumatic end to a remarkably bruising year overshadowed by a largely disappointing UK economic performance, a debut Budget that shattered Labour's pre-election hopes to succeed the exhausted Tories as the “party of business” and now, increasingly, of humbling U-turns.

Entrepreneur Luke Johnson, whose investments have included Gail's and Pizza Express, told the Standard he rated her first-year performance as a one out of ten.

He said: “The mood among the investors, entrepreneurs and business leaders I talk to is close to despair about the prospects for the UK and the leadership of the Government. The National Insurance increases combined with the employment rights bills and the net zero agenda have had an impact on confidence that is close to catastrophic.”