Chancellor of the Exchequer Rachel Reeves has made clear that the United Kingdom will not subordinate its principles to the pursuit of a trade agreement with the United States, and defended the government's decision not to support an American-Israeli assault on Iran.
In an interview with Bloomberg's Stephanie Flanders, Reeves said that strategic military choices cannot be governed by commercial incentives. "You cant make a decision about whether to get British armed forces involved in a conflict because it may or may not make it more likely to get a trade deal," she told the interviewer. On the legal question underpinning the government's stance, Reeves said: "We judged that there was not a legal basis for offensive action on Iran."
The comments come after a public rebuke from President Trump, who speaking at the White House on Tuesday said he was "not happy" with the UK and added, "This is not Winston Churchill that we're dealing with." Reeves said she is tracking developments closely as Iran launches retaliatory strikes against countries in its vicinity, and that protecting UK households and businesses from economic fallout is a priority.
"We have to see how things evolve in terms of where oil and gas prices go going forward," Reeves said, underlining the government's attention to energy-market fluctuations. She also said she planned to meet with North Sea oil companies on Wednesday to gather their perspectives on market direction, naming Equinor (NYSE:EQNR), Shell (LON:SHEL) and BP (LON:BP) specifically.
Reeves made the remarks after delivering her spring economic update in the House of Commons on Tuesday. That statement included the latest figures from the Office for Budget Responsibility, which warned that growth this year was expected to be weaker even before taking into account any potential impacts from the conflict in the Middle East.
On the bilateral trade front, Reeves expressed confidence that the trade arrangement agreed with the US last year could be preserved. "We are in constant negotiation and dialogue with the US administration," she said, while adding that London also seeks to expand other areas of its trade relationship. "Of course, there are other areas as well where we want to go further with our trade links with the US."
The chancellors comments frame a government balancing act: upholding legal and ethical constraints on military action, while seeking to shield the domestic economy from energy-price shocks and to keep trade discussions with Washington on track. Her planned consultations with major North Sea producers highlight the immediate focus on managing potential volatility in oil and gas markets as regional tensions unfold.