UK's Reeves seeks to defuse rental dispute with release of new details

By Sarah Young and Elizabeth Piper

LONDON (Reuters) -British finance minister Rachel Reeves released more information on Thursday to show she had not been responsible for a failure to secure a rental licence for her home, seeking to defuse what could have been another damaging crisis for the government.

After a late-night apology on Wednesday for her "inadvertent mistake", Reeves released further emails sent between her husband and a property company, which showed the company had promised to obtain the licence on her family's behalf.

Questions over whether Reeves had wilfully broken the rules could have threatened her position just weeks before she is due to deliver her crucial budget on November 26.

Prime Minister Keir Starmer had stood by his finance minister and earlier said her apology was a sufficient resolution to the issue, rejecting calls for an investigation.

GOVERNMENT RELEASES CORRESPONDENCE TO SUPPORT REEVES

In a letter to Starmer, Reeves said the letting agency and her husband had found correspondence confirming that on July 17, 2024, the company had said it would apply for the licence.

"They have also confirmed today they did not take the application forward, in part due to a member of staff leaving the organisation," she wrote. "Nevertheless, as I said yesterday, I accept it was our responsibility to secure the licence."

Reeves said she had since applied for a licence.

Starmer's spokesperson had earlier told reporters that new information had emerged in the case - in reference to the correspondence - and said it had been handed to the government's ethics adviser.

British government bond prices fell slightly after the spokesperson's comments were published.

Gilt futures edged down by around 15 ticks from a session high after the news. The value of sterling was little changed against the dollar.

Bond prices fell much more sharply in July when Reeves was visibly upset and cried in parliament, alarming investors who were briefly left uncertain about her grip on the job and what that meant for her plans to fix Britain's public finances.

Lawmakers from the opposition Conservative Party had called for a full investigation into Reeves and her rental licence, with Conservative Party finance policy chief Mel Stride saying her position was untenable.

Reeves is under huge pressure before her November budget, with expectations she will be forced to break election pledges and hike some taxes after warnings official forecasts could show the economy is in a worse state than once thought.

Since winning an election 15 months ago, Starmer has already lost some high-profile ministers, most notably former deputy prime minister Angela Rayner. She resigned in September after a report found she had breached the ministerial code by not paying the correct taxes when she purchased a property.

(Reporting by Sarah Young, Catarina Demony and Elizabeth Piper, additional reporting by Muvija M; editing by Kate Holton and Ros Russell)