Chancellor Reeves faces pressure for growth strategy as UK borrowing costs rise

Chancellor Rachel Reeves faces challenges as UK government borrowing costs reach a 16-year high and the pound falls to a 14-month low. She is currently in China, accompanied by Bank of England governor Andrew Bailey, amid criticism for her timing. Despite rising borrowing costs, fixed-term mortgage rates have not yet increased, unlike the rapid changes seen after the 2022 mini-Budget. The Bank of England plans to continue interest rate cuts, but uncertainty remains about the number of cuts expected. Reeves' fiscal rules, which aim to reduce debt as a share of national income, may need adjustments due to higher interest payments. A more detailed growth strategy is necessary to address economic stability and avoid potential spending cuts.