Reeves doubles down defending China trip as fears over impact of economic crisis grow
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Early indications that chancellor will slash disability benefits and delay increases to the defence budget to the 2030s to avoid breaking borrowing rules. Rachel Reeves has doubled down on defending her controversial trip to China as concerns grow that she will return to a full blown economic crisis next week.
![[Rachel Reeves has travelled to Beijing in a bid to boost economic ties with China (Aaron Favila, Pool/AP)]](https://static.independent.co.uk/2025/01/11/09/11-848c1d15a7fb4eca9c4a63a4c3f05f9a.jpg)
Briefings have suggested that the chancellor is planning on slashing billions off disability benefits and postponing increasing defence spending to 2.5per cent of GDP until the 2030s in a bid to stay within her own borrowing limits. Turmoil in the gilt markets has overshadowed Ms Reeves's trip to Beijing, with the Conservatives accusing the chancellor of having "fled to China" rather than explain how she will fix the economy.
The trip is part of Labour's push for greater engagement with Beijing, after a freezing of relations under previous Conservative prime ministers. But it also comes amid spculation that Ms Reeves is going to be forced to break her “golden rule”on borrowing limits and a report revealed by The Independent showing that a new inflation cost of living crisis could be around the corner with the price of imports on food and electrical items among other staples set to rise by up to 20 per cent.
The value of the pound also slid last week as investors held their breath on the state of the UK economy. But defending her trip, Ms Reeves described it as a "significant milestone" in Britain's relationship with China as she met vice-premier He Lifeng.
