Back to today’s briefing

Story perspectives

Chancellor Reeves Defends Budget Amid Economic Turmoil in China

1/12/2025

36 5

Summary

Reeves Defends Trade

Chancellor Rachel Reeves is under fire during her China visit, as UK borrowing costs soar and the pound weakens. Critics urge her to focus on the domestic economic crisis, but Reeves remains steadfast, declaring her budget "non-negotiable." She aims to build pragmatic trade ties with China, hoping to ignite growth and restore economic stability.

Summary

UK Bonds Turmoil

UK bond markets are in chaos as gilt yields soar to their highest levels since 2008 and 1998. Rising inflation and stagnant growth, compounded by US economic policies under President Trump, are fueling this instability. The plummeting pound raises alarms about looming fiscal crises and escalating borrowing costs for homeowners, leaving many anxious about the future.

History

Historical Context

Chancellor Rachel Reeves' visit to China highlights a complex history of UK-China relations, which have fluctuated since the Cold War. The "Golden Era" of cooperation post-1997 deteriorated following the 2019 Hong Kong protests. Current economic challenges, including soaring gilt yields and a weakening pound, echo past crises, notably the 2008 financial crash, prompting urgent calls for domestic economic focus amidst international engagements.

1 of 3

Reeves Defends Trade

Chancellor Rachel Reeves is under fire during her China visit, as UK borrowing costs soar and the pound weakens. Critics urge her to focus on the domestic economic crisis, but Reeves remains steadfast, declaring her budget "non-negotiable." She aims to build pragmatic trade ties with China, hoping to ignite growth and restore economic stability.

1 / 3