Bank of England governor visits China as UK economy faces challenges

Andrew Bailey, Governor of the Bank of England, and Chancellor Rachel Reeves are in China to strengthen economic ties. This trip comes as the UK faces financial challenges, with borrowing costs at their highest since 2008 and the pound dropping to its lowest value in over a year. The FTSE 250 index also fell to a nine-month low before recovering. Rising yields on government bonds indicate concerns about the UK's fiscal sustainability, prompting warnings about potential tax increases or spending cuts to meet fiscal rules. Despite the economic turmoil, government officials maintain that markets are functioning normally. Critics have questioned the timing of Reeves' trip, suggesting she should focus on domestic financial issues instead.