Rachel Reeves today pulled out of an event at the London Stock Exchange – at which she had been due to hail a ‘new golden age’ for the City – as global markets tumbled.
The Chancellor cancelled her appearance at an event celebrating the recent record performance of the FTSE 100 after Donald Trump sparked a fresh crisis.
The US President has threatened to slap tariffs on the UK and other European allies until a deal is reached for him to purchase Greenland from Denmark.
Mr Trump has also not ruled out military action to achieve his aim of taking the territory, which is a semi-autonomous part of the Kingdom of Denmark.
In the wake of the chaos, top stock indices in the UK, France and Germany were down sharply on Monday morning, while gold prices rose to hit a fresh record high.
Ms Reeves’ withdrawal from the London Stock Exchange event came as she sat in the audience for an emergency address by Sir Keir Starmer in Downing Street.
The Prime Minister said the dispute over Greenland should be resolved through ‘calm discussion between allies’ rather than military action or a trade war.
He also signalled Britain would not engage in a trade war with the US by imposing retaliatory tariffs, insisting this was ‘not the right way to resolve differences within an alliance’.
Rachel Reeves’ withdrawal from the London Stock Exchange event came as she sat in the audience for an emergency address by Sir Keir Starmer in Downing Street
Donald Trump has threatened slap tariffson the UK and other European allies until a deal is reached for him to purchase Greenland from Denmark.
Ms Reeves had been due to use her appearance at the London Stock Exchange to unveil rules designed to make it easier and cheaper for firms to list in the capital.
‘Two years ago, some said the City’s best days were behind it. They were wrong,’ she had been expected to say.
‘As the FTSE 100 reaches record highs and global firms once again choose London, we are seeing the first signs of a new golden age for the City.’
The FTSE 100 was down about 0.6 per cent by mid-morning on Monday, with a mixture of stocks including financial firms and industrial stocks moving lower.
Other European indicies were recording heavier losses, with Germany’s Dax index down about 1.5 per cent and Frace’s Cac 40 tumbling by 1.6 per cent.
The price of Brent crude oil was also falling by around 0.7 per cent, to 63.70 US dollars per barrel.
Meanwhile, gold prices soared to a new record high as investors sought out the safe haven asset, hitting about 4,680 US dollars (£3,491) per ounce during the morning.
Mr Trump said he would charge the UK a 10 per cent tariff ‘on any and all goods’ sent to the US from February 1, increasing to 25 per cent from June 1, until a deal is reached on Greenland.
The US President said the same would apply to Denmark, Norway, Sweden, France, Germany, the Netherlands and Finland – all of whom are members of NATO.
Top stock indices in the UK, France and Germany were down sharply on Monday morning, while gold prices rose to hit a fresh record high
John Wyn-Evans, head of market analysis for wealth management group Rathbones, said Mr Trump’s tariff threat was ‘consistent with his habit of using trade as leverage’.
‘Markets have reacted negatively, and while past episodes suggest he often retreats when economic costs build, further volatility is likely,’ he warned.
Amisha Chohan, head of equity research at Quilter Cheviot, said she was not expecting a repeat of the steep market falls from last April, following Mr Trump’s ‘liberation day’ tariff announcement.
‘This is more likely to be slower burn while diplomacy plays out,’ she said.
‘However, as with any tariffs they have the potential to cause volatility in inflation and thus interest rates may not come down as swiftly as investors would like, and this would ultimately be negative for markets.’
