Rachel Reeves vows action on growth amid rising debt costs

The chancellor was addressing the Commons following her return to the UK from a trip to China to drum up investment.

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

“The economic headwinds that we face are a reminder that we should, indeed we must, go further and faster in our plan to kick-start economic growth that plunged under the last government,” she told MPs.

Reeves promised to set out new economic policies after next week’s meeting of the World Economic Forum in Davos.

The BBC has been told the industrial strategy, promised in Labour’s manifesto,, external is now being “fast tracked” to help bolster growth.

Sector-specific announcements, like this week’s strategy for boosting artificial intelligence, will be rolled out in the coming weeks.

On Tuesday, the yield on 30-year government bonds – the interest rate at which the government pays back investors – stood at 5.42% – close to the highest since 1998.

The yield on debt due for repayment in 10 years was 4.87% – close to the highest since 2008.

If sustained, higher UK borrowing costs may raise annual debt interest by £10bn by 2029-30, wiping out the Chancellor’s £10bn headroom against her self-imposed fiscal rules.