Problems on the gilt markets have overshadowed the Chancellor’s trip to China.

Rachel Reeves has said she will “take action” to meet her fiscal rules following turbulence on the gilt markets.

Increases in the Government’s borrowing costs have sparked concern that the Chancellor will be unable to meet her debt and spending targets, requiring either tax rises or deeper spending cuts when she delivers a fiscal statement at the end of March.

Speaking to reporters in Beijing, where she is seeking to rebuild economic ties with China, the Chancellor declined to give a “running commentary” on the markets but insisted her fiscal rules were “non-negotiable”.

She added: “We will take action to ensure that we meet those fiscal rules”.

That action is reported to include deeper spending cuts than the 5% efficiency savings already pencilled in for the spending review due to be published later this year, while cuts to the welfare bill are also said to be under consideration.

The Chancellor has previously ruled out further tax rises after hiking taxes by £40 billion at the Budget in October.

The turbulence on........

© Shropshire Star