Adam Durbin
Live reporter

It's been a busy afternoon in Westminster, as Wednesdays so often prove to be, with a lively PMQs session and a lengthy hearing for the chancellor.

Two major themes emerged for today's political news cycle, the state of the economy and the looming prospect of a full-blown global trade war with the US.

Keir Starmer and Kemi Badenoch clashed over the "fragile" economy, with the Tory leader pressing the prime minister on revised down forecasts for growth and living standards.

The PM hit back by citing the previous Conservative government's handling of the economy, accusing Badenoch of making up a "fantasy figure" of families being £3,500 worse off under his government.

On tariffs, Starmer reiterated the government's position that they would not reflexively respond to Donald Trump plans to introduce more import taxes.

Rachel Reeves echoed that later in the afternoon when she faced questioning at the Treasury Select Committee, saying that the UK would wait to see how other nations would answer tariffs - stressing the government would not rush into anything and risk jeopardising a possible future US-UK trade deal.

• Follow live all the lead-up and fallout of Trump's tariff announcement tonight

Let's take a moment to have a quick look at what Rachel Reeves has told MPs this afternoon:

• It's "absolutely crucial" to boost economic growth, especially outside of London, in order to raise living standards, she said
• She defended her economic record, saying that key international economic bodies like the International Monetary fund support her policies
• Asked about gloomy economic forecasts and market reaction to her borrowing proposals, Reeves made the case that UK borrowing costs are in line with European peers like France and Germany
• Pressed over what the government will do amid looming trade war with the US, Reeves said she would not jeopardise the possibility of an economic deal with President Donald Trump "posturing" over his plan for tariffs
• She added that the "prize" on offer was a possible US-UK trade deal, adding that government would not "rush into action" and was in active discussions with EU officials over how possibly to respond

Dharshini David
Deputy economics editor

Image source, Parliament TV

Chancellor Rachel Reeves acknowledges that tariffs President Trump imposes can be damaging to UK growth, inflation - even if they're not imposed on British goods. But she again steers away from the idea the UK will retaliate, saying that the government - and businesses it's consulted - don't want to risk undermining the ongoing talks on an economic agreement with the US.

In the hearing at the Treasury Select Committee, Reeves reiterated that she believes in free and fair trade and pointed out that trade in goods between the two nations is broadly balanced.

She repeated that discussions are ongoing in the "rapid dialogue" the US had agreed to have with the UK following the PM's visit to Washington.

While there had been discussions with other nations, including the EU, about "an appropriate response", she said that the government had been "clear that we'll approach this in a clear headed way".

The government and businesses she'd consulted with have agreed it would be counterproductive to undermine work on an economic agreement with a (tariff) response that might amount to "posturing"

Reeves said that both growth and inflation could be damaged even if the UK were not subject to tariffs, due to impacts elsewhere - but economists stress the implications are very uncertain.

Back to Committee Chair Meg Hillier now, who observes that there is a risk that Rachel Reeves' Spring Statement forecasts - and the headroom she has cleared - will be made redundant when Trump's new charges are revealed later tonight

The chancellor responds somewhat indignantly that the government is "not passive, waiting for things to happen", and points out that Labour has made moves to grow the economy, for instance by introducing a planning and infrastructure bill.

As a result, Reeves says she accepts that there are risks headroom might be impacted by tariffs, but stresses that the government is focused on "growing the economy".

How could the UK's relationship with America affect UK financial services, Glen next asks.

He mentions the language and policies of the Trump administration and asks Reeves if she sees a risk to the fragmentation of global financial regulation?

"No, I don't," Reeves says, but the UK's financial services sector needs to be competitive on the global stage to ensure jobs and investment into UK financial services, she adds.

Image source, Parliament TV

Glen presses Reeves of the looming possibility of a trade war, asking: "How will you respond to tariffs?"

The chancellor replies saying "first let's see how other countries and trading blocs respond", adding that the UK will approach possible US tariffs in a "clear headed way".

The "prize on offer is an economic agreement" with the US and the government doesn't want to "get ahead of ourselves", Reeves says, noting the key is to avoid "posturing" and rushing into decisions for a "quick headline".

She adds that depressed demand and rising inflation overseas from tariffs hitting other nations still impacts the UK, even if the government secures an agreement with the Trump administration.

Reeves concludes that she understands US concerns over global imbalances in trade, but makes the case that the UK has a "balanced" trading relationship with Washington and so increasing tariffs on the UK would "not be the right policy" from Trump.

Sticking with the hot topic of tariffs, Conservative MP John Glen says the committee is concerned that the OBR world economy forecast does not take them into account.

"You said you would not be coming back with more tax increases," he says, asking Reeves if she can confirm this.

Last year's Budget was a once in a parliament event, Reeves responds, to wipe the slate clean after the "economic mismanagement" of the previous government.

She says it would not be responsible to write another four years' worth of Budget, and reassures the committee that the government has "put public finances on a firm footing".

Image source, Getty Images

Talk moves onto Trump's tariffs - we're covering what to expect when those new charges on imports to the US are announced later today on another live page.

Facing the Treasury Committee, Reeves is asked how effective she thinks she's been in negotiating to try and avoid harmful tariffs on the UK.

The chancellor responds that talks are ongoing with the US and adds that she believes in "free trade".

She then mentions "ongoing" work on an economic agreement with the US, with the two parties in "rapid dialogue".

Committee chair and Labour MP Meg Hillier asks Reeves about the decision last October to raise National Insurance (NI) contributions.

Some companies have paused investment and recruitment because of this, Hillier says, and asks Reeves if she has any regrets about her decision.

Reeves says they had to take the decision to raise NI to ensure the stability of public finances. Some small business are excluded from the rise, she adds.

Hiller asks what metrics Reeves is looking at to ensure the small businesses are successful? Reeves lists a few of them and then claims wages are rising twice the rate of inflation.

Image source, Parliament TV

Baldwin continues, asking Reeves about the "deterioration" in the economic forecasts and the reaction of the markets to the borrowing announcements in the Spring Statement.

The chancellor says the cost of government borrowing has "moved in line with our European peers" - citing similar costs to the French and German governments.

When she took over the Treasury, national debt under the previous Conservative government was "twice as high" as when Labour was last in power in 2010, which means the UK is spending £105 billion pounds on debt interest payments, she says.

"That's more than we spend on defence, the Home Office and the Ministry of Justice combined," Reeves says.

She says that is why it is "absolutely essential" that the government has "returned fiscal stability" to the economy and beginning to bring down debt as a share of GDP, adding that she would rather spend money on the "British people's priorities" than on servicing government debt.

Conservative MP Harriett Baldwin says that in the space of five months, the Office for Budget Responsibility (OBR) forecast has worsened in many areas, including inflation, borrowing, and unemployment figures.

Referencing "Awful April", as we heard from Badenoch during PMQs and noting that bills are set to rise and tariffs are expected tonight, she puts it to Reeves that business and consumer confidence took a "real hit" after the October Budget,

Reeves goes on the defence, saying the International Monetary Fund has been supportive of her measures, and that the Organisation for Economic Co-operation and Development (OECD) has downgraded a range of countries in the G7.

She also notes that the OBR has upgraded its growth forecasts for the next four years.

Baldwin presses Reeves again on whether or not she accepts that business and consumer confidence has deteriorated, to which Reeves responds that there are costs for every policy, but also for irresponsibility.

She argues that she has brought stability back to the economy and that the government has put extra investment into the NHS by increasing national insurance contributions. She says this was the right priority.

Reeves is asked about two milestones announced by the prime minister – higher growth and higher living standards in every region.

Why is it important to have those twin objectives, Labour MP Yuan Yang asks.

Reeves says economic growth is crucial for keeping the country competitive, for improving living standards and providing the money to fund public services.

She points to government plans to build more homes every year - she says the public tells her are desperately needed, but says that it also directly contributes to the public purse through an increase in tax revenue because the economy will be bigger.

The government also needs to measure household disposable income because that is what impacts whether the general public feels "better off", she says.

Labour MP Dr Jeevun Sandher focuses on Reeves's growth targets, asking her how important it is to increase productivity outside London - which he says is 26% higher than the national average.

Reeves says it's "absolutely crucial". She says achieving strong economic growth is not just about lines on a graph but about the money in people's pockets.

"We want to see economic growth and the benefits it brings felt in all parts of the country," she says, adding that the government announced investment in projects around the country at last year's Budget.

Reeves also speaks of yesterday's announcement to increase the national minimum wage and living wage, which she says will give a pay rise to 3 million working people, the majority of which are outside London.

She adds that there is work happening towards increasing the number of well paid jobs outside of the capital.

Image source, Parliament TV

This afternoon's Treasury Committee session has begun with Chancellor Rachel Reeves immediately being asked about comments made by Treasury Minister Darren Jones.

Jones used the example of pocket money when talking about benefits cuts for disabled people.

Reeves says that the language Jones used was "clearly not right" and adds that the MP has apologised.

Jones, who is deputy to Rachel Reeves, was defending welfare cuts on the BBC's Politics Live after the Spring Statement when he made the gaffe.

Kevin Peachey
Cost of living correspondent

The government has said the rise in wages, as well as a freeze on fuel duty and other policies, were giving workers more money in their pockets.

As of 1 April, the National Living Wage went up from £11.44 an hour to £12.21, external.

However, the Conservatives said that benefit will be "wiped out" by the increase to employers' national insurance contributions, while the Liberal Democrats said they were "very disappointed" with Labour's approach on the economy so far.

Reform UK has previously said it would impose taxes on the renewable energy sector, blaming net-zero for higher energy bills. The Green Party said it would introduce a wealth tax.

• Read more about the April increase to household bills

There were many economic announcements made last week, including sweeping changes to the benefits system, a boost in defence spending and planned cuts to civil service jobs.

Some of the most significant changes are over the welfare system, with cuts to cause some people lose support from next year, although universal credit payments are set to rise from next April.

Among the sweeping reforms are a cut to health-related universal credit for new claimants and a freeze in many existing payments.

The statement also included some less-than-stellar economic forecasts, with experts predicating a fall in growth to 1% expected for this year - although these have been slightly revised up for the next four years. There is also an anticipated rise in inflation to 3.2% for this year, before reducing to the government's 2% target by 2027.

Cuts to public services are also expected, including a target to reduce the administrative costs of government departments by 15% by 2030 and about 10,000 civil service jobs are expected to go.

• How will the Spring Statement affect you?

Image source, Reuters

The next moment in today's political news cycle is coming up shortly, when Rachel Reeves will be quizzed by MPs at the Treasury Select Committee.

In the session, due to start at 14:30, the chancellor will likely face questions on the state of the UK economy, public services and government finances in the wake of her spelling out her economic plans at the Spring Statement last week.

The committee is chaired by Labour MP Dame Meg Hillier, with the remaining 10 MPs on it made up of six more Labour backbenchers, two Conservatives and two Liberal Democrats.

We'll be covering all the key moments from Reeves's appearance here, and you will be able to stream her appearance by hitting watch live at the top of this page.

Image source, Reuters

At the start of PMQs Keir Starmer repeated his line that the UK will take a "calm, pragmatic" approach to US tariffs. The British government is seeking a trade agreement with the US that would avoid sweeping tariffs - or, at least, unwind those tariffs at some point in the future.

Let's take a moment to look back at how negotiations have unfolded in the last few days:

• Sunday: Prime Minister Keir Starmer spoke to US President Donald Trump over the phone, with Downing Street saying the pair had "productive negotiations" about an economic deal
• Monday: The prime minister's spokesman said talks on an economic deal between the two countries to avoid tariffs had been "constructive", but he did not rule out retaliating if they were imposed on the UK
• Tuesday: Trade Secretary Jonathan Reynolds told the BBC that the UK is best-placed to eventually overturn US trade tariffs, despite failing to negotiate an exemption before Tuesday. Reynolds did not give a timescale on when an exemption might be agreed, and said the UK government was keeping "all options on the table"

Are NHS waiting lists falling?published at 13:34 British Summer Time 2 April

13:34 BST 2 April

By Tamara Kovacevic

During PMQs, Keir Starmer said: "We’ve driven down waiting lists."

He was referring to the NHS in England, as Scotland, Wales and Northern Ireland manage their own health systems.

It's true that the overall number of waits for non-emergency treatment in England is going down, but the rate of progress is slow.

When Labour came into power in July 2024, the total number of waits was 7.62 million.

In January 2025 (the latest NHS England figures, external), it fell to 7.43 million.

Will the National Insurance rise cost families £3,500?published at 13:12 British Summer Time 2 April

13:12 BST 2 April

By Anthony Reuben

Talking about the increase in employers’ National Insurance (NI) contributions, Kemi Badenoch said “on average, families will be £3,500 poorer”.

This figure was put out by the Conservatives earlier this week and some context is needed.

First, it is added up over five years and is based on forecasts from the Office for Budget Responsibility (OBR), which looked at how much of this NI might be passed onto workers through things like lower wages.

BBC Verify spoke to Stuart Adam from the Institute for Fiscal Studies think tank. He argues the Conservative analysis overstates the losses, by ignoring the fact that people receiving lower wages would also pay less income tax and National Insurance.

Also, Badenoch talked about the effect on families - and the Conservative figure was based on working households. If you looked at all families, then the figure would be considerably lower.