Starmer and Reeves deal with difficult economic backdrop

The faltering economy, rising government borrowing costs, falling approval ratings: it’s no wonder perhaps that senior ministers, not least the Chancellor, are wasting a smile these days.

Remember also that Sir Keir Starmer and Rachel Reeves are the pair who best represent Labour’s project for 2020; The party’s revival and comeback was based on relying on the economy.

And yet markets right now are collectively ruling out Starmer and Reeves’ economic plan is not exactly a ringing endorsement – ​​and wobbly markets could lead to political wobbles.

These should not be exaggerated, but they should not be ignored either.

What we are seeing is brutal government action; An unforgiving backdrop of economic recession, which critics say ministers have made worse.

Some Labor MPs are concerned about how difficult it is proving to govern, with complaints flooding into their inboxes and the possibility that the government will have less money than they expected to spend on their priorities.

Against that background it should not be surprising that journalists would double-check whether the Prime Minister has confidence in his Chancellor that the market does not – yes, he told us, although without explicitly committing to keeping him in office. Till the next elections, as asked by the questioners.

Cue several encouraging headlines before Downing Street says it actually wants Reeves to remain as Chancellor for the rest of this Parliament.

People at Number 10 considered the exchange absurd, given how close Starmer and Reeves have been over the years and how intertwined their political fortunes have been.

Each of them has to hope that markets settle down, government borrowing costs fall and the likelihood of very difficult decisions becomes less.

Once again the Prime Minister stressed that the government’s so-called fiscal rules – the parameters it sets when borrowing to look credible – cannot be compromised.

This, combined with the existing commitment not to impose further taxes, strongly suggests that the government will have to spend less than it intended on all types of considerations if it continues to spend more than it intends on repaying borrowing costs.

And then, enter the next, an industrial revolution revolving around artificial intelligence, countless hard drives and computer chips.

The Prime Minister has the enthusiasm to exploit its opportunities.

You bet he has, you might think: maybe he can get more from public services at less cost, because whizzy computers are doing the job better and faster than humans, or the theory According to this it is so.

Perhaps it will also, as many hope, revolutionize the economy – as well as everything else – transforming productivity and boosting economic growth.

Sir Keir Starmer is taking a deliberately upbeat, positive stance on AI, emphasizing the opportunities rather than focusing on the risks and threats.

For a Prime Minister who has been accused by his critics in recent months of talking down the UK economy, his tone on AI was spirited, attempting to do what prime ministers can do – rally the country on an issue. Becoming a mood-maker and how it is approached.

But history tells us about industrial and other types of revolutions, and that means there are losers.

Overcoming that – as a society and for our governments – is the challenge ahead.

The challenge now is to deal with these bumpy markets and flat economy.