Rachel Reeves heads to China amid pressure over borrowing costs
Published On Jan 9, 2025, 10:52 PM
Chancellor Rachel Reeves is visiting China to strengthen trade ties amid rising government borrowing costs in the UK, which have reached their highest levels in years. Critics argue she should focus on domestic economic issues instead of traveling. High borrowing costs threaten public services and may lead to spending cuts or tax increases. Senior financial leaders accompany Reeves, hoping to revitalize UK-China economic dialogue suspended since the pandemic. Economists warn persistent borrowing burdens could force fiscal austerity ahead of the next budget announcement in March.
Stock Forecasts
EWU
Negative
The increasing government borrowing costs may negatively impact UK public finances and could lead to potential cuts in spending or tax rises, which can slow economic growth.
HSBC
Positive
Given the importance of UK-China trade, the outcome of this visit may boost specific sectors tied to exports, particularly in technology and finance sectors if relations improve.
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