Rachel Reeves fought back the tears in the House of Commons today. That's an unusual, and upsetting, sight. As Tory leader Kemi Badenoch pressuring Keir Starmer to answer whether Reeves would be the Chancellor if Labour wins, he didn't say yes. That silence was deafening. Opponents interpreted it as weakness, but supporters at home were worried about her future. Later in the day Downing street said, Reeves "is going nowhere" and has the "full support of the Prime Minister." Nonetheless, it marked a turning point, at 2:41 pm, politics became personal, and budgets got blown up.
Pressure, Politics & Personal Strain
Reeves was under immense pressure this week. She was relying on savings from welfare cuts - £4.8 billion (over 77 million people), but after facing revolt from 49 Labour MPs, the government pulled back. That back flip created a sizeable hole in their budget. At PMQ's, Badenoch said Reeves is merely a "human shield" for the PM’s “incompetence” and claimed she was "absolutely miserable." And Reeves looked like she was hanging in there, at best. Her sister, Labour's Ellie Reeves, held her hand as she left. You could feel the stress - this is more than just political, it's personal. And in the back of the minds of people focused on their bills there is real concern: if we do not have the money, will we see taxes go up? Or will we see basic services squeezed even further?
Markets React & What No One's Talking About
This wasn't merely emotional, it shook markets too. Post-PMQs:
- UK government bond yields spiked, signalling investors are spooked.
- Sterling fell, signalling uncertainty on the state of the economy.
- Analysts said the market actually likes Reeves—trusts her that she has policy discipline—but that it's the U-turn (and how it interacts with the rest of the political economy) that worries.
Here's something most aren't talking about yet:
- New borrowing mechanisms on the table - Reeves may issue green bonds to close the gap—where she raises eco-friendly cash (the carbon cost) with no associated tax increases.
- Creative revenue initiatives - Watch for future conversation about taxes on digital services, or wealth taxes. These could be coded as being "fairer," when compared to increases in income tax.
- Building trust with the electorate -This public moment of vulnerability could help build trust, signalling she truly cares—not just playing political games.
Urgency on Budget & Next Steps
The next Budget, due in autumn 2025, feels urgent now. With nearly £5bn missing, Reeves faces a real crunch. Options on the table:
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Tough cuts to public services
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New or higher taxes
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Borrowing more—though that clashes with her “no deficit” pledge
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Delaying reforms—like Personal Independence Payment reviews until 2026
PMQs today showed this isn’t a small bump—it’s a crossroads. And Reeves will have to show whether she can steer through it while keeping the trust of MPs and markets.
Real Reactions From the Public
Here are real comments online that show how people reacted:
“All is not well on the front bench - a tear rolls down Rachel Reeves’s face during PMQs”
All is not well on the front bench - a tear rolls down Rachel Reeves’s face during PMQs pic.twitter.com/Q7KEbTO46d
— Jack Parker (@JackParkr) July 2, 2025
Those reactions came hours after PMQs, and they show empathy is growing—even among some critics.
Fresh Angles Worth Watching
There are a few deeper points worth noting that haven’t been widely covered:
- The unwritten costs of welfare changes: The act of reversing proposed cuts to benefits is not only the savings lost but the effect on disabled individuals, the elderly, and families accessing PIP and Universal Credit also impacts budgets for housing, health, child welfare budgets, etc.
- Women in politics: If Reeves is the first female chancellor, that in its own right is momentous. But to see her cry (something that is so often associated with stigma regarding leaders which I usually find appalling), might pave the way for a larger change. In showing her vulnerabilities without qualms she may encourage more women in public life that this is OK.
- Another layer of family in Commons: The image of Ellie Reeves walking her sister out of the chamber conveys a familial politics that blends with broader political family in a way that I have rarely seen in the chamber before. The two moments of them holding hands and talking spoke volumes about the more personal aspect of this work.
- There are layers of Labour’s factionalism: The total of 49 MPs rebelling suggests larger fissures. Rey certainly has to balance her own economic goals and principles with wider external factors from her party in a precarious balancing act.
What Comes Next
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Autumn Budget: All eyes will be on Reeves—she needs answers and balance.
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PMQs returning: Plus Badenoch and other Tory leaders will strike again.
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Welfare Bill amendments: MPs are watching to see if future changes happen after 2026 review.
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Public & investor trust: She’ll need visible signs she can deliver—steady markets, protected services, no broken promises.
