Rachel Reeves has a message for anyone considering her job: the economy grew 0.3% in March, defying City forecasts of a 0.2% contraction, and she’d rather not have that messed up by a leadership contest. Speaking after the Office for National Statistics reported 0.6% growth for the first quarter of 2026 - up sharply from 0.1% in the final quarter of last year and making Britain the fastest-growing economy in the G7 - Reeves declared that now is “not the time to put our economic stability at risk.” The subtext, for anyone in earshot, was clear: if it ain’t broke, don’t fix it.

The fighting talk works on multiple fronts. Externally, it fends off critics of Keir Starmer’s two-year-old government, which has struggled to show much progress on its top priority of growing the economy. Internally, it’s a none-too-subtle message to Wes Streeting and Angela Rayner, who are preparing leadership bids amid another dramatic day in Westminster. City bond traders, for their part, are betting that Reeves’s reputation for fiscal prudence could help calm a storm in the gilt market.

But the good news may be fleeting. The UK has a habit of recording bumper first-quarter growth only to see activity fizzle out, and most economists predict a far weaker second half - with several warning that the fallout from the Middle East conflict could tip Britain into recession. The Bank of England is poised to raise interest rates to combat rekindling inflationary pressures, adding to the pain for mortgage borrowers and businesses. Households still reeling from the cost of living crisis face a renewed hit from spiralling energy prices, and Reeves has done little to cushion the blow, warning that costly interventions are unaffordable.

The Resolution Foundation predicts the Iran war will damage typical household incomes by £550 this year and increase government borrowing by £16bn by the end of the decade. With rising borrowing costs, high inflation, and elevated government debt, whoever ends up in No 10 will have to navigate a precarious backdrop. Reeves’s message may be “don’t fix what isn’t broken,” but the economy is starting to look a bit wobbly.