We don’t need to worry about rise in borrowing costs, minister insists

London: A Cabinet minister is trying to calm fears about rising government borrowing costs. Culture Secretary Lisa Nandy spoke out after UK bond yields hit their highest since 2008.

She told broadcasters that there’s no need for panic. Nandy emphasized that these trends are global and not just affecting the UK. She mentioned that the Labour government’s tax and spending rules are firm.

Chancellor Rachel Reeves is ready to make deeper cuts if needed to keep the budget balanced. She’s already ruled out raising taxes or borrowing more money.

When asked about the situation, Nandy said, “I don’t think we should be worried.” She pointed out that the UK is still on track to be one of the fastest-growing economies in Europe.

Nandy also defended Reeves’ upcoming trip to China, saying it’s crucial for the UK to maintain a relationship with the second-largest economy in the world. She believes what happens in China impacts everyone in the UK.

Further spending cuts might be announced in March, as the government is already asking departments to find savings. The recent rise in bond yields shows how much it costs the government to borrow money.

Yields on 10-year gilts recently peaked at 4.89% before settling slightly lower. The cost of longer-term borrowing has also increased, with 30-year gilts reaching their highest level since 1998.

As markets opened, yields climbed again, but they eased back a bit after early trades. The pound also dipped slightly against the dollar.

Critics are drawing comparisons to the fallout from former Prime Minister Liz Truss’ mini-budget last year. The rising costs of servicing government debt could impact Labour’s financial plans.

With the Chancellor having ruled out tax increases and more borrowing, the focus is now on potential spending cuts. Global concerns about government bonds have been rising, especially with worries about inflationary policies from the US.