WASHINGTON (Realist English). U.K. Finance Minister Rachel Reeves reaffirmed her commitment to the government’s self-imposed fiscal rules but warned that Britain must confront “hard truths” about the global and domestic challenges shaping its economic outlook.
Speaking to CNBC on the sidelines of the IMF Annual Meetings in Washington on Friday, Reeves cited the Russia–Ukraine conflict, Middle East tensions, and rising trade barriers as key factors weighing on growth and stability.
“The key thing for me as Chancellor is to be honest with people about the challenges we face,” she said. “I will respond to those in the budget.”
Reeves is set to deliver her Autumn Budget on November 26, her second since becoming Chancellor of the Exchequer. The announcement comes amid a slowing economy, persistent inflation, and elevated government borrowing costs — all testing the limits of her fiscal framework.
While declining to reveal specific tax or spending measures, Reeves said she wants the U.K. to remain competitive for global investment and innovation, describing Britain as “the place to trade, to invest, and to bring global talent.”
She also urged the country’s financial regulators to balance risk management with a stronger focus on economic growth.
Under Reeves’ fiscal rules, day-to-day government spending must be funded by tax revenue, not borrowing, and public debt must fall as a share of GDP by 2029–30. However, the Chancellor recently hinted that meeting those goals could require breaking an earlier pledge not to raise taxes for working people — a move that could prove politically costly.
Breaking her own fiscal rules, analysts warn, could unsettle financial markets. Earlier this year, speculation over Reeves’ future in government triggered volatility in U.K. bond markets, underscoring investor confidence in her cautious fiscal stance.
With Britain’s 30-year bond yields above 5% — the highest among G7 economies — Reeves said her priority remains reducing borrowing costs and restoring fiscal credibility.
“The deficit has been running too high for the last few years,” she said. “As Chancellor, I’m determined to bring down debt and build a growing economy on a foundation of fiscal responsibility.”
Reeves’ previous efforts to curb welfare spending and raise business taxes faced resistance both from within her party and from the private sector, limiting her room to maneuver ahead of what is expected to be one of the most politically sensitive budgets in years.
