Rachel Reeves says she has iron grip' on finances as borrowing costs surge

Rachel Reeves' insistence on maintaining control over public finances comes as 10-year government borrowing costs rise to their highest level since the 2008 financial crisis, raising concerns about meeting fiscal rules. Treasury sources reiterated the government's commitment to fiscal discipline, stating that ensuring economic growth and supporting working individuals remain paramount, despite analysts warning that this increasing borrowing cost could jeopardize the previously established financial framework.

The ongoing increase in UK government bond yields and the consequential drop in the pound are attributed to worries surrounding the government's tax and spending strategy, which many believe lacks efficacy. Analysts note that this situation mirrors the turmoil following Liz Truss's mini-budget in 2022, with market reactions indicating a growing fiscal emergency if corrective actions are not implemented swiftly.

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