Chancellor considers deeper public service cuts as UK borrowing costs rise

Chancellor Rachel Reeves is considering deeper cuts to public services to address rising UK borrowing costs, which have reached their highest levels since 1998. This follows a week of market turmoil that saw the pound drop to a 14-month low. Reeves has ruled out tax increases and is preparing to announce further departmental spending reductions in the spring. Current plans include cuts of more than 1% annually for unprotected departments after two years of increased funding. While some market conditions have stabilized, concerns remain about the impact of potential cuts on public services. Labour MPs and economists express alarm over the implications of deeper spending reductions amid ongoing economic pressures.