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Tears of the UK’s treasury chief spooked financial markets

The weekly session in which the British prime minister is questioned by lawmakers in Parliament can be an ordeal for the government leader.

For Cabinet members, it’s usually simply a matter of backing their boss.

But on Wednesday the spotlight ended up on Chancellor of the Exchequer Rachel Reeves during the Prime Minister's Questions session because it became evident that she was crying as she sat beside Prime Minister Keir Starmer.

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This screen grab of Chancellor of the Exchequer Rachel Reeves, right, crying as Prime Minister Keir Starmer speaks during Prime Minister's Questions in the House of Commons, London, Wednesday July 2, 2025.

It's not known what triggered the tears, later said to have been personal.

They came as Starmer sought to fend off attacks that his year-old government was losing its authority and that he was about to fire Reeves to regain the initiative.

Markets spooked

Traders got spooked, with the interest rate charged on the UK’s 10-year benchmark bond in the markets up sharply, and the pound down.

It's not known what triggered the tears, later said to have been personal.

The moves were a sign investors had lost confidence in UK financial assets.

Reeves had become associated with fiscal discipline, in particular a rule of covering day-to-day government spending with tax revenue, said Andrew Wishart, an economist at Berenberg Bank.

“The markets are concerned that if the Chancellor goes, such fiscal discipline would follow her out of the door," he added.

With Starmer insisting on Thursday that Reeves would remain in post, the markets calmed down.

READ MORE: NSW Police officer kicked in head, stomach while on welfare check

Prime minister's weekly ordeal

Prime Minister's Questions, or PMQs, can come as close to a gladiatorial contest as is possible in a modern legislative chamber.

Very little deference is given to the man or woman holding the highest office in the land.

The prime minister is considered the first among equals.

 Britain's Chancellor of the Exchequer Rachel Reeves during a visit to the Sir Ludwig Guttman Health & Wellbeing Centre on July 03, 2025 in London, England.

Like all other members of Parliament, the prime minister represents one of 650 constituencies.

And nowhere is that shared connection more noticeable than at noon every Wednesday in the House of Commons.

Starmer stands for half an hour every week to be quizzed by friends and foes.

He may get soft balls, but there's always a potential zinger around the corner.

The leader of the biggest opposition party, currently the Conservative Party's Kemi Badenoch, has the best chance to knock the prime minister off course.

With six questions, she can lay traps and go for the jugular.

Typically it's more theatre than substance, and the weekly shouting match is consistently the most-watched parliamentary event, viewed around the world, including on C-Span in the United States.

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 Britain's Chancellor of the Exchequer Rachel Reeves and Britain's Prime Minister Keir Starmer during a visit to the Sir Ludwig Guttman Health & Wellbeing Centre .

This week was fraught

This week's session appeared to have more at stake than usual following a chaotic run-up to a welfare reform bill.

With scores of Labour lawmakers opposed, Starmer was forced to scrap key planks of the bill — at a cost, politically and economically.

For a prime minister, with one of the biggest majorities in history, it was a sign of weakness.

Many Labour MPs blame Reeves, for her rigid adherence to her budget rules.

As usual, Starmer was flanked to his left by Reeves, who didn't look her usual self, clearly bloated around the eyes.

Badenoch showed little mercy, describing Reeves as “absolutely miserable” and a “human shield” for Starmer.

READ MORE: The world's most important currency is suddenly sliding backwards

She asked Starmer whether he could repeat a pledge that Reeves would stay in her post until the general election, which has to take place by the middle of 2029.

While praising Reeves' handling of the economy, Starmer didn't give that assurance, and it was around this point that Reeves wiped away a tear.

“How awful for the Chancellor that he couldn’t confirm that she would stay in place," Badenoch responded.

The immediate political aftermath

Starmer's Downing Street operation faced questions over Reeves' teary appearance. Could it have been hay fever?

Had Starmer told Reeves she would be fired for the government's recent woes, which has seen Labour's approval ratings slide?

Starmer's press spokesman said it was a “personal matter,” insisted Reeves was “going nowhere” and had the prime minister's “full backing.”

Later, Starmer told the BBC that Reeves would be Chancellor for a “very long time” and that it was “absolutely wrong” to suggest her distress was related to the welfare U-turn.

READ MORE: What we know about the rare bat virus that has claimed a fourth life

A day on

Images of Reeves' agitated state were emblazoned across newspapers and remained a key item on the news agenda.

Starmer repeated on Thursday that Reeves would remain Chancellor “for years to come" and sought to explain why he hadn't comforted Reeves during PMQs.

“In PMQs, it is bang, bang, bang," he said at an event where he and Reeves hugged.

"That’s what it was yesterday and therefore I was probably the last to appreciate anything going on in the chamber.”

Reeves appeared more like her usual self.

“People saw I was upset, but that was yesterday," she told Sky News.

“I guess the thing that is different from my job and many of your viewers is that when I’m having a tough day, it’s on the telly.”

The world’s most important currency is suddenly sliding backwards

The Australian dollar is enjoying a resurgence as of late, but it's not down to anything special about our local currency.

In fact, plenty of currencies are performing strongly in 2025, thanks to one surprising laggard: the US dollar.

This week, the greenback chalked up its worst opening half of a year in more than half a century, dropping 10.7 per cent over the six months to June 30.

READ MORE: Trump trade war blamed for surprise shrinking of US economy

US dollars.

Not since 1973, when it fell 15 per cent, has it had a weaker start to the year.

The US dollar has been the dominant currency across the globe since the end of World War II, currently used for about 90 per cent of all foreign exchange transactions.

So what's causing it to go backwards?

In part, it's a bit of a correction.

"Given the strength in the US dollar in recent years, it has looked overvalued (based on purchasing power parity), especially since the pandemic," AMP deputy chief economist Diana Mousina wrote early this week.

"So the recent depreciation is probably… a normalisation closer to fair value."

But there are concerns the slide could continue, and in a year when the dominant finance story has been the tariffs thrown around by the White House, it will come as little surprise that Donald Trump is playing a key role.

READ MORE: The 'grown-up conversation' we need to have about the GST

A hit to US GDP from those tariffs is weighing on investors, as are concerns about debt levels linked to the president's "Big Beautiful Act", and his more America-first approach to foreign policy.

There are also longer-term factors at play – in a more polarised world, the proportion of US dollars in foreign exchange reserves has shrunk from about 70 per cent two decades ago to a tick under 60 per cent today.

All are contributing to concerns that it's no longer the reliable, safe-haven currency it once was.

"If you cannot with certainty take a view on the position of the US administration, it's hard to commit capital," Arun Sai, a strategist at Pictet Asset Management, said.

"What we've seen with the current administration in the last few months is that this notion of the US being a default destination for global capital is being challenged."

But another significant issue for the greenback is what Trump's been saying about US Federal Reserve Chairman Jerome Powell, who on Thursday (Australian time) admitted he would likely have cut interest rates were it not for the White House's tariffs.

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Republican presidential nominee former President Donald Trump speaks at a campaign rally at Van Andel Arena, Tuesday, Nov. 5, 2024, in Grand Rapids, Mich.

In Australia, you'll pretty much never hear Treasurer Jim Chalmers say "Reserve Bank" without uttering "the independent" first.

Trump has no such qualms about trying to influence his central bank, having constantly belittled Powell in an attempt to get him to lower interest rates, and therefore make borrowing cheaper for the government.

The president has variously labelled Powell "a total and complete moron", "stupid", "a dumb guy", "average mentally", "a very stupid person", and "low IQ for what he does" – and that's just in the last two weeks.

He's also sent a handwritten note to the Fed demanding ultra-low interest rates, saying the US's cash rate should be "1 per cent… or better".

It's currently above 4 per cent.

Trump has threatened to fire Powell – who he actually appointed during his first term before an extension by Joe Biden – and called for him to resign, and said last week that he already has a shortlist of replacements, fuelling speculation he could announce a successor well before Powell's term expires next year.

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A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, on April 4.

That would be a "terrible idea", AGF Investments chief US policy strategist Greg Valliere said, as it would be "sure to annoy and confuse the financial markets if there are two Fed chairs".

"The damage to the Fed's independence would be considerable if Trump becomes a monetary back-seat driver, second-guessing Fed policies," he said.

It's those independence concerns that are proving detrimental to the US dollar. 

"One of the key foundations of the strong dollar, of the dollar as a dominant currency globally, is to have an independent central bank," ING foreign exchange strategist Francesco Pesole said.

"So, if [global investors] feel there is greater influence of politics into the Fed's decisions, then they are pricing in a greater risk for the dollar."

That said, there's no obvious replacement for the greenback as the world's international currency, despite a host of countries including China, Russia, India, Brazil, Indonesia and South Africa wanting one.

"There has been talk about these countries using a new currency called 'The Unit', which would be… a digital currency on the blockchain," Mousina wrote.

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"But setting up a potential new currency faces many hurdles, particularly from the Western world that dominates the financial markets and global payments system."

There could be a little more good news for Australian travellers to the US, with AMP forecasting the Aussie dollar will buy just under 70 cents by mid-to-late next year.

But against other currencies, it's likely to remain fairly stable, and the greenback's slide – if it continues – could have complex and far-reaching consequences.

"If the US dollar loses its safe-haven status, then the Australian dollar may fall less in times of uncertainty," Mousina said.

"[This] will impact its role as a shock absorber for the Australian economy (like when it fell in the GFC and pandemic, which boosted our exports and supported the economy).

"This may put more pressure on the RBA to support growth in time of global shocks."

– With CNN

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What we know about the rare bat virus that has claimed a fourth life

Australia has recorded its fourth death of the bat lyssavirus — a very rare and fatal virus that can lay dormant for years.

Health authorities yesterday confirmed a man, aged in his 50s, from northern New South Wales had died several months after being hospitalised with a bite. 

It is the fourth case in Australia and the first in New South Wales. Here's everything we know about the virus.

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What is Australian bat lyssavirus?

Australian bat lyssavirus (ABLV) is a very rare virus that circulates in bats and is closely related to rabies.

It can spread to humans if they are bitten or scratched, or if bat saliva comes in contact with the eyes, nose, mouth or any broken skin.

"To infect a human, the virus needs to pass from the bat's saliva into a wound in the skin," University of Sydney's wildlife disease ecologist Dr Alison Peel said.

There is no risk if you live or walk near a bat roosting area. 

ABLV was first identified in 1996 and there has only been four cases since; three in Queensland and one in New South Wales.

It has not been found in bats outside of Australia but overseas bats can carry other forms of lyssaviruses, including rabies.

Do all Australian bats carry lyssavirus?

Any bat in Australia, including flying foxes, fruit bats and insect-eating ​microbats, can potentially carry ABLV.

But, according to Peel, the number of bats infected by the virus is typically very low. 

"Studies have looked for the virus in thousands of healthy bats and failed to find it," she said.

READ MORE: Police believe men found dead in Sydney home died at different times

How to tell if a bat has lyssavirus?

It is hard to tell whether a bat is carrying the virus, as they do not appear or behave any differently than an uninfected bat.

"Like humans and other animals, infected bats may become sick and die, however, some bats may appear unaffected," Peel said.

"So, you can't always tell just by looking at a bat whether it's infected or not."

What are the symptoms of Australian bat lyssavirus? 

Symptoms are similar to those caused by rabies and can start off like the flu.

This may include a headache, fever and fatigue.

The illness can rapidly progress to paralysis, delirium, seizures and death typically within one to two weeks.

It is also hard to tell when you contracted the virus as symptoms can start anytime from a few days to several years after infection. 

READ MORE: Stinky town notices an improvement after expert sniffs out source of odour

How soon after a bat bite do you need treatment?

ABLV can be fatal if it is not treated immediately.

Health Direct advises anyone who is scratched or bitten by a bat to wash the wound with soap and water for at least 15 minutes, apply an antiseptic with an anti-virus action and get medical help as soon as possible.

ABLV does not have its own vaccine but can be treated with a combination of rabies immunoglobulin and rabies vaccinations.

There is no treatment for the virus once symptoms have started.

"It is incredibly rare for the virus to transmit to humans, but once symptoms of lyssavirus start in people who are scratched or bitten by an infected bat, sadly there is no effective treatment," NSW Health Director in Health Protection Keira Glasgow said.

How do you prevent Australian bat lyssavirus? 

The simple answer is to avoid touching any bats.

Only trained, protected and vaccinated wildlife handlers should be interacting with bats.

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Kyiv hammered in largest missile and drone barrage since war began

Waves of drone and missile attacks targeted Kyiv overnight into Friday in the largest aerial assault since Russia's invasion of Ukraine began more than three years ago, officials said, amid a renewed Russian push to capture more of its neighbour's land.

The barrage killed one person and wounded at least 26 others, including a child, and inflicted severe damage across multiple districts of the capital in a seven-hour onslaught, authorities said.

Blasts lit up the night sky and echoed across the city as air raid sirens wailed.

READ MORE: Putin and Trump discuss Iran and Ukraine in phone call, Kremlin says

Kyiv, Ukraine

The blue lights of emergency vehicles reflected off high-rise buildings, and debris blocked city streets.

"It was a harsh, sleepless night," Ukrainian President Volodymyr Zelenskyy said.

Russia has been stepping up its long-range attacks on Ukrainian cities. Less than a week ago, Russia launched what was then the largest aerial assault of the war.

That strategy has coincided with a concerted Russian effort to break through parts of the roughly 1000-kilometre front line, where Ukrainian troops are under severe pressure.

Russia launched 550 drones and missiles across Ukraine during the night, the country's air force said. The majority were Shahed drones, but Russia also launched 11 missiles in the attack.

Alya Shahlai, a 23-year-old Kyiv wedding photographer, said that her home was destroyed in the attack.

"We were all in the [basement] shelter because it was so loud, staying home would have been suicidal," she told The Associated Press.

Kyiv, Ukraine

"We went down 10 minutes before and then there was a loud explosion and the lights went out in the shelter, people were panicking."

Five ambulances were damaged while responding to calls, officials said, and emergency services removed more than 300 tons of rubble.

Trump 'not happy' with Russia's attacks

The attack on Kyiv began the same day a phone call took place between US President Donald Trump and Russian President Vladimir Putin.

On Friday, Trump and Zelenskyy had a "very important and meaningful" conversation by phone, said Andriy Yermak, the head of Ukraine's presidential office. He said that details of the talks would be provided later.

US-led international peace efforts have been fruitless so far. Recent direct peace talks have led only to sporadic exchanges of prisoners of war, wounded troops and the bodies of fallen soldiers. No date has been set for further negotiations.

Kyiv, Ukraine

Ukrainian officials and the Russian Defence Ministry said another prisoner swap took place on Friday, though neither side said how many soldiers were involved.

Zelenskyy said most of the Ukrainians had been in Russian captivity since 2022. The Ukrainian soldiers were classified as "wounded and seriously ill".

When asked if he made any progress during his call with Putin on a deal to end the fighting in Ukraine, Trump said: "No, I didn't make any progress with him today at all."

"I'm very disappointed with the conversation I had today with President Putin because I don't think he's there. I don't think he's looking to stop [the fighting], and that's too bad," Trump said.

According to Yuri Ushakov, Putin's foreign affairs adviser, the Russian leader emphasised that Moscow will seek to achieve its goals in Ukraine and remove the "root causes" of the conflict.

"Russia will not back down from these goals," Ushakov told reporters after the call.

Russia's army crossed the border on February 24, 2022, in an all-out invasion that Putin sought to justify by falsely saying it was needed to protect Russian-speaking civilians in eastern Ukraine and prevent the country from joining NATO. Zelenskyy has repeatedly called out Russian disinformation efforts.

Pentagon halts deliveries of air defence missiles

The US has paused some shipments of military aid to Ukraine, including crucial air defense missiles. Ukraine's main European backers are considering how they can help pick up the slack. Zelenskyy says plans are afoot to build up Ukraine's domestic arms industry, but scaling up will take time.

The Ukrainian response needs to be speedy as Russia escalates its aerial attacks. Russia launched 5438 drones at Ukraine in June, a new monthly record, according to official data collated by The Associated Press.

Kyiv, Ukraine

Ukrainian Foreign Minister Andrii Sybiha said earlier this week that Russia also launched more than 330 missiles, including nearly 80 ballistic missiles, at Ukrainian towns and cities that month.

Throughout the night, AP journalists in Kyiv heard the constant buzzing of drones overhead and the sound of explosions and intense machine gun fire as Ukrainian forces tried to intercept the aerial assault.

"Absolutely horrible and sleepless night in Kyiv," Sybiha wrote on social media platform X.

"One of the worst so far."

Ukraine's Economy Minister Yuliia Svyrydenko described "families running into metro stations, basements, underground parking garages, mass destruction in the heart of our capital".

Kyiv, Ukraine

"What Kyiv endured last night, cannot be called anything but a deliberate act of terror," she wrote on X.

Kyiv was the primary target of the countrywide attack. At least 14 people were hospitalised, according to Kyiv Mayor Vitali Klitschko.

Zelenskyy called the Kyiv attack "cynical." In Moscow, the Defence Ministry claimed its forces targeted factories producing drones and other military equipment in Kyiv.

Russia strikes 5 Ukrainian regions

Ukrainian air defenses shot down 270 targets, including two cruise missiles. Another 208 targets were lost from radar and presumed jammed.

Russia successfully hit eight locations with nine missiles and 63 drones. Debris from intercepted drones fell across at least 33 sites.

In addition to the capital, the Dnipropetrovsk, Sumy, Kharkiv, Chernihiv and Kyiv regions also sustained damage, Zelenskyy said.

Emergency services reported damage in at least five of Kyiv's 10 districts.

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Teenagers allegedly behind wheel of stolen car at 180km/h on M1

Two teenagers have been arrested after allegedly stealing a car from a shopping centre car park and leading police on a chase from Logan to Pimpama on the Gold Coast.

The Mazda 3 was allegedly stolen from Logan Central in Browns Plains between 7pm and 8pm yesterday.

It was later allegedly spotted driving dangerously along the Pacific Motorway southbound, at speeds of up to 180 km/h before taking the exit at Yatala.

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Pimpama crash

Police deployed spikes at Pimpama just before 10pm but the car continued, before eventually coming to a stop at Mimbeena Drive at Ormeau, where police say a young boy and a young man began running from officers.

A 14-year-old and an 18-year-old were arrested a short time later with the help of the dog squad.

A 14-year-old Logan Central boy has been charged with unlawful use of a motor vehicle, dangerous operation of a vehicle and driving unlicensed and was expected to appear before Southport Children's Court today.

Pimpama crash

An 18-year-old Alberton man has been charged with unlawful use of a motor vehicle and possession of dangerous drugs and is due to appear at Southport Magistrates Court on July 17.

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Calls for national disaster declaration as seafood industry ‘ripped to pieces’

South Australian fishers are grappling with a severe economic downturn as the state's toxic algal bloom threatens the local seafood industry. 

Declining sales, fuelled by consumer concerns over contamination, have prompted calls for the algal bloom to be declared a national disaster by the federal government.

Rod Ness, a commercial fisherman in Victor Harbor for three decades, expressed deep concern about the devastation facing the industry. 

READ MORE: Stinky town notices an improvement after expert sniffs out source of odour

SA toxic algal bloom

"It's a massive part of the foundation of the state. And it's being ripped to pieces," Ness said.

The crisis was a central topic at an urgent meeting hosted by the state government. 

"The public is scared of… eating fish. And our sales at our fresh fish shop have dropped 70 per cent in the last three weeks," Ness said. 

The algal bloom, which has been spreading for months, is showing no signs of abating. 

"Now that it's here, it's going to be hard to get rid of," Ness said. 

"And while we've seen a lot of weather changes, a lot of that has just pushed the bloom around, instead of getting rid of it."

READ MORE: The email six million Australians should expect from Qantas

SA toxic algal bloom

There are reports scientists wrote to the federal government seeking funding to deal with the worsening problem but were knocked back.

"If we had dead fish and marine life washing up day after day on Bondi Beach or on the North Shore of Sydney, there'd be a national outcry," Greens senator Sarah Hanson-Young said.

The federal government has so far resisted calls to declare the situation a national disaster.

"Well I'd have to look at the request because it hasn't come to me but we'll obviously work with governments across the board increasingly to deal with the impacts of climate change," Climate Change Minister Chris Bowen said.

SA toxic algal bloom

The state government says it may increase pressure on the Commonwealth to reconsider its position if the bloom continues to spread. 

Ness voiced his frustration with the federal response. 

"I'm questioning them not jumping at the chance to call it a national disaster," he said. 

"I know a lot of fishermen from a lot of various areas that are very stressed out and doing it pretty hard."

This article was produced with the assistance of 9ExPress.