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The Pound Sterling drops even as UK Chancellor Reeves rules out speculation that she is stepping down. UK’s new welfare bill is expected to lead to an increase in taxes or spending cuts. The US Dollar underperforms as Trump’s tariff deadline expires on July 9. The Pound Sterling (GBP) faces selling pressure against its peers on Friday despite United Kingdom (UK) Chancellor of the Exchequer Rachel Reeves committing to remain in her role till the next elections. On Thursday, Reeves confirmed while speaking to reporters that she will remain in office despite fiscal headwinds, till her term. The same day, a spokesperson also confirmed on behalf of UK Prime Minister Keir Starmer that “She [Reeves] is going nowhere”. The speculation of Chancellor Reeves’ stepping down stemmed after she was seen in tears at the House of Commons earlier this week, while revealing the new welfare bill. However, Reeves clarified that she was upset due to some personal reasons. Chancellor Reeves announced an increase in the standard allowance for Universal Credit (UC) in the new welfare bill, a move that has raised questions over the credibility of her self-imposed fiscal rules. Investors worry that new adjustment in the welfae scheme will increase fiscal risks for the UK economy. To offset the cost of the same, she would need to cut spending or raise taxes. “Of course, there is a cost to the welfare changes that Parliament voted through this week and that will be reflected in the Budget,” Reeves said, BBC reported. In the last Autumn Budget, Reeves promised not to borrow to fund day-to-day public spending; and to get debt falling as a share of the UK economic output by 2029/30. New welfare reforms are expected to wipe out governments’ plans to save £5.5 billion by 2029-30, according to data…

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Filed under: News - @ July 5, 2025 5:26 am