Reeves Promises Action to Tackle Fiscal Rules Amid Rising Borrowing Costs
Rachel Reeves is determined to take necessary steps to meet fiscal targets as borrowing costs increase, raising concerns about economic stability
Rachel Reeves, UK, China, Fiscal Rules, Borrowing Costs, Economic Ties
Beijing: Rachel Reeves is stepping up to ensure she meets her fiscal rules. With the gilt markets in turmoil, she’s feeling the pressure.
Borrowing costs are climbing, and there’s chatter about whether she can hit her debt and spending targets. This could mean tax hikes or deeper cuts when she speaks at the end of March.
While in China, she’s trying to strengthen economic ties. Reporters asked her about the markets, but she kept it cool, saying her fiscal rules are “non-negotiable.”
She’s there to boost trade with China, which is a big deal for British businesses. She even visited a Brompton store while there.
Reeves made it clear: “We will take action to ensure that we meet those fiscal rules.” This could mean more cuts than the 5% savings already planned for later this year.
She’s also looking at cutting welfare costs. After raising taxes by £40 billion last October, she’s ruled out any more tax increases for now.
The market chaos has overshadowed her trip, with critics saying she should’ve stayed home to deal with the issues. This visit is the first major economic meeting between the UK and China since 2019.
It follows a meeting between Sir Keir Starmer and Xi Jinping at the G20 last year, as Labour aims to warm up relations with China after a chillier approach from the last government.
Reeves called her trip a “significant milestone” for Labour, claiming it could bring in £600 million to the UK economy over the next five years.
After meeting with Chinese officials, she said they found common ground on finance, trade, and climate issues. But she stressed that economic ties shouldn’t compromise national security.
She’s also committed to addressing human rights concerns, especially regarding the treatment of Uighur Muslims and the situation in Hong Kong.
When asked about risks in getting closer to China, she emphasized the need for a pragmatic relationship with countries worldwide, which is vital for the UK’s interests.
After her talks, she raised issues like national security and human rights, saying not every conversation would be easy, but it’s crucial for both economies to build a stable relationship.
She also brought up the case of Jimmy Lai, a British national detained in Hong Kong, and concerns about forced labor in Xinjiang.
Meanwhile, opposition parties are not happy about her trip. Shadow chancellor Mel Stride criticized her priorities, while Liberal Democrat leader Daisy Cooper urged her to return and address the market crisis.
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