For McDonnell to say that the party was planning for the eventuality of a run on the pound – a scenario that would see a mass selling of sterling on foreign currency markets due to investor fears that the currency (and economic standing of the U.K.) is going to lose value – reveals that he is well aware that financial markets would be spooked by a Labour win, worrying that it would lead the country into more borrowing to finance its pledges to end austerity.
Issuing a response to the remarks, Conservative Chancellor Phil Hammond said McDonnell had "privately conceded the disastrous effects that Labour's plans would have on Britain's economy – a collapse in business investment and a crash in the value of the pound, causing a shock wave of inflation," adding that "Labour's plans would go too far, and ordinary working people will end up footing the bill."
But Labour leader Corbyn, a long-time ally and colleague of McDonnell, told the BBC that he was "right to look at all these scenarios."
Corbyn himself is no stranger to controversy, having fought off criticism, internal leadership challenges and resignations of shadow ministers to remain as leader, a move seemingly vindicated by the party's good performance in June. On Wednesday, Corbyn is to give a speech in which he will say the party is ready for government.
In extracts of his speech released by the Labour party last night, Corbyn will state that the next Labour government "will be a different, giving power back to the people."
"Against all predictions, in June we won the largest increase in the Labour vote since 1945 and achieved Labour's best vote for a generation. It's a result which has put the Tories on notice and Labour on the threshold of power," Corbyn will say.
"Yes, we didn't do quite well enough and we remain in opposition for now. But we have become a government-in-waiting. And our message to the country could not be clearer: Labour is ready… We are ready for government."