Reeves says fiscal rules ‘non-negotiable’ during bid to boost ties with China

Beijing: Rachel Reeves is really sticking to her guns about those fiscal rules. She made it clear that they’re “non-negotiable” while visiting a bike shop in Beijing. It’s a tough time back home with the gilt markets acting up, but she’s focused on what she believes is essential for the economy.

While she didn’t dive into the UK’s financial mess, she stressed that her rules are crucial for keeping things stable. She said, “Economic stability is the bedrock for economic growth and prosperity.” Sounds like she’s got a plan, right?

But here’s the kicker: gilt yields are climbing, which means borrowing is getting pricier. That’s got folks worried she might have to make deeper cuts than she’s already planning. And with a spending review coming up, departments might need to trim their budgets by 5% or more.

Reeves has ruled out tax hikes, so cuts to welfare are on the table. That’s a tough spot to be in, and some experts are saying it could freak out the markets even more. The Conservatives are even saying she’s “fled to China” instead of dealing with the UK’s issues.

Her trip is part of a bigger effort to mend ties with China after a chilly period under the last government. She met with Chinese vice-premier He Lifeng, marking the first UK-China economic dialogue since 2019. She called it a “significant milestone” and pushed for more trade and investment.

But she’s also clear that while they’re looking to strengthen ties, national security can’t take a backseat. She mentioned the need for honesty about disagreements, especially regarding human rights issues.

When asked about the risks of closer ties with China, she said it’s all about having a pragmatic relationship with countries worldwide. After her time in Beijing, she’s set to head to Shanghai. It’s a busy trip for her, that’s for sure!