Chancellor Rachel Reeves is facing mounting pressure to cancel her trip to China, as the UK economy teeters on the brink of crisis. The pound has fallen to a 14-month low, and government borrowing costs have risen sharply, prompting calls from opposition parties and economists for her to return home.
Reeves, however, maintains that the trip is "in the national interest." She argues that fostering economic growth requires "careful pragmatic cooperation with international partners," particularly in areas like trade and investment. This comes despite the controversy surrounding a recent alleged Chinese spy's close association with the Duke of York.
Opposition parties are highly critical. The Tories accuse Reeves of being "missing in action," while the Liberal Democrats demand an alternative economic plan. The Institute for Fiscal Studies (IFS) warns that Reeves's inherited economic challenges, coupled with government decisions, create a difficult path forward. Concerns are mounting over the government's ability to meet fiscal rules amidst rising interest rates and potential cuts to public services.
Senior government figures express anxieties about the potential for economic downturn. One anonymous source voiced concern about the lack of economic growth, while another criticized Reeves's recent budget changes as unproductive.
Despite the criticism, the government defends the trip, citing China's projected economic leadership and potential benefits for the UK. The Treasury emphasizes the chancellor's commitment to improving the UK's economic standing.
The trip underscores the complexities of modern international relations. Reeves's visit aims to improve relations with China, while addressing the political sensitivities involved in a complex global environment. The chancellor will engage in discussions about trade, investment, and, crucially, Russia's war in Ukraine. The visit will also involve meetings with business representatives.
