Rachel Reeves vows action to boost growth amid rising debt costs

Chancellor Rachel Reeves pledged to improve economic growth “further and faster” after market turmoil caused the cost of servicing Britain's debt to rise.

Pressure on public finances has increased in the past few days after government borrowing costs reached their highest level in years.

Conservative shadow chancellor Mel Stride called it a “downing street-created crisis” and said a business tax rise in the October budget undermined Britain's economic prospects.

Reeves said she had “no illusions” about the scale of the economic challenge.

It is understood she will now announce Labour's promised industrial strategy within the next two weeks.

The Chancellor of the Exchequer delivers a speech in the House of Commons after returning to the UK From a trip to China to attracting investment.

During the debate, she accused Conservative critics of ignoring the “global fluctuations” behind rising borrowing costs in other countries such as the United States, Germany and France.

“The economic headwinds we face remind us that we should, indeed we must, further accelerate our plans to kick-start the economic growth seen under the previous government,” she told MPs.

Reeves pledged to develop new economic policies after next week's World Economic Forum meeting in Davos.

BBC learns of industrial strategy, The Labor Party manifesto promised, It is now being “fast tracked” to help boost growth.

industry-specific announcements, Like this week’s AI promotion strategywhich will be launched in the coming weeks.

On Tuesday, the yield on 30-year government bonds – the rate at which the government repays investors – was 5.42% – Close to the highest level since 1998.

The yield on 10-year debt maturing is 4.87%, near its highest level since 2008.

If sustained, rising UK borrowing costs could result in a £10bn increase in annual debt interest payments by 2029-30, The breach of the fiscal rules set by the Chancellor himself has wiped out £10bn of space for the Chancellor of the Exchequer.

Speaking in the House of Commons, Stride accused the government of “devaluing the economy” and “crippling business” by increasing employers' budget for national insurance contributions.

He added: “Economic growth has been completely stifled, inflation is rising and affecting millions of people, interest rates have remained high for an extended period of time and business confidence has hit rock bottom.”

“This is a crisis created by Downing Street.”

On Monday, Sir Keir Starmer said he had “full confidence” in Reeves and that the government was committed to adhering to its fiscal rules.

But Conservative leader Kemi Badenock accused him of refusing to back her after he refused to specifically answer at a press conference whether she would stand at the next election.

downing street Later confirmed The Prime Minister intends to keep Reeves as Prime Minister for the duration of this Parliament.