Chancellor confirms the UK has sent the third £752 million payment as part of its £2.26 billion loan for Ukraine to buy military equipment
Ahead of meeting the Ukrainian PM on Wednesday, Reeves says the UK will keep pressure on Russia – including action against sanctioned “shadow fleet” vessels – and keep options open to join the EU’s €90bn loan effort
Announcement comes as Chancellor flies to Washington for IMF Spring Meetings, setting out Britain’s plan to keep costs down for people and build a more resilient economy.
The Chancellor has confirmed the UK has sent £752 million to Ukraine, as part of the UK’s £2.26 billion loan to spend on military equipment.
Rachel Reeves is in Washington for the IMF Spring Meetings, where she is urging international partners to act together on global security and stability, including sustained support for Ukraine.
She will be setting out Britain’s plan for economic security through the Middle East crisis — prioritising stability, keeping costs down for families and businesses, taking back control of our energy costs, and going further and faster on our plan for a stronger, more resilient economy.
The loan to Ukraine is backed by the profits of immobilised Russian sovereign assets held in the EU, and will help Ukraine procure equipment to defend itself against Russia’s unprovoked aggression. This does not count as part of the UK spending 2.5% of GDP on defence.
This funding will be spent on critical military equipment to meet Ukraine’s urgent needs, including long‑range strike capabilities, air defence missiles and systems, and Ukrainian‑produced drones to help protect civilians and national infrastructure from Russia’s attacks.
The announcement comes as the Defence Secretary confirms that the UK is set to deliver 120,000 drones as part of a separate £3.75 billion UK military support package for Ukraine.
In Washington tomorrow, Reeves will meet with Ukrainian Deputy Prime Minister Yulia Svyrydenko and hold talks with G7 finance ministers, reaffirming the UK’s support for Ukraine and the need to maintain pressure on Russia.
Chancellor of the Exchequer Rachel Reeves said: ““The UK stands shoulder to shoulder with Ukraine. This funding will help deliver the military equipment Ukraine needs as it defends itself against Russia’s unprovoked war.
“I am proud that the UK is a leading partner in providing vital support to Ukraine, and we will continue to step up to do more while keeping pressure on Russia.”
The Chancellor also confirmed the UK would look carefully at options to enable participation in the EU’s €90 billion loan to Ukraine.
She also highlighted how the UK is increasing pressure on Russia following the Prime Minister’s announcement that the UK is ready to deploy Armed Forces and law enforcement to interdict UK‑sanctioned Russian “shadow fleet” vessels transiting UK waters, stepping up pressure on Putin’s war effort.
Working people will be protected from unfair price rises with new plans set out by the government today to detect and crack down on companies if they exploit the crisis in the Middle East.
Ministers are concerned that some companies could exploit the crisis to carry out price gouging – when a company puts prices up to an unfair and unjustifiably high level during a crisis, knowing that customer have little choice but to pay.
To deal with this unfair practice, a new anti-profiteering framework is being brought in by the Government and regulators like the Competition and Markets Authority (CMA) to clamp down on price gouging if it takes place.
As part of that, the government will not hesitate to introduce new time-limited, targeted powers for the CMA and other key regulators if that is needed, and the exact powers are being worked through at pace.
The move will further strengthen our world-class competition and consumer protection regime, which is already protecting households, and comes as the CMA have stepped up their monitoring of fuel prices and accelerated their review of fuel margins made by businesses since the conflict began.
The announcement follows the Chancellor and Energy Secretary’s meeting with petrol retailers to discuss what more can be done to support motorists with the cost of living, and the Chancellor is expected to meet with supermarkets and banks to discuss how they can support consumers in the coming days.
A Government spokesperson said:“We are fighting your corner to keep the cost of living down in these uncertain times. We will not allow companies to exploit this crisis to hike their prices to unjustifiable levels.
“Whether at the fuel pump filling up your car or at the till paying for your groceries, we are working with regulators to make sure the price you pay is a fair one.”
The Chancellor will deliver more details later today.
Shake up of rules on who can join a credit union will support more families, workers, students and retirees to access fairer financial products.
Bigger, stronger credit unions as the Government raises the cap that can limit growth and makes it easier for credit unions to expand and merge.
Move will see more households access cheaper alternatives to high-cost credit, helping people access fair loans and build savings through community lenders.
MORE people will benefit from affordable loans and savings as the Westminster Government changes the rules so more people can join credit unions, helping households with the cost of living.
Delivering on its manifesto pledge to grow the mutuals sector, the Government is today (18 March) setting out reforms to the rules on who can join credit unions in Great Britain.
By making it easier for credit unions to serve more people in their communities, the changes will support families, workers, students and retirees to access fairer financial products and build financial resilience.
Credit unions offer affordable, community based financial services and play an important role in promoting financial inclusion. Enabling credit unions to expand and broaden their membership will help ensure that more people can access fair, lower-cost alternatives to high-cost credit. This will strengthen the provision of responsible financial services and support households with the cost of living.
Economic Secretary to the Treasury Lucy Rigby said: “These reforms will help more people get access to affordable credit and a safe place to save, so families have a real alternative to high-cost credit.
“We’re delivering on our manifesto pledge to grow the mutual sector by backing credit unions to expand and serve more communities. It’s another step in making financial services more accessible and supporting people to build financial resilience.”
The reforms will include:
Bigger credit unions, serving more people: Government will raise the cap on locality-based credit unions from three million to 10 million potential members, making it easier for them to grow and merge.
Students included: Students will be able to join locality-based credit unions, alongside people who live or work in the area.
Modern rules for modern families and working lives: Credit unions will be able to serve more relatives and household members, and members will be able to stay with (or join) their credit union after retirement as full members.
These reforms follow the Call for Evidence on credit unions’ common bond rules launched after the Chancellor’s first Mansion House speech.
This also builds on the Government’s wider work to improve financial inclusion and resilience across the UK. As part of the Financial Inclusion Strategy, the Government is also working closely with the financial services sector and consumer groups to bring forward interventions to make it easier for people to access a bank account, support people to build savings and improve financial education.
Lakshman Chandrasekera, Chief Executive Officer, London Mutual Credit Union said: “I warmly welcome today’s announcement. Raising the common bond cap to 10 million gives credit unions the freedom to grow and keep wealth within the communities we serve.
“In London, we see first-hand the demand for fair, affordable finance. This reform means many more people across the UK will be able to access it — building savings, reducing reliance on high-cost credit, and developing real financial resilience. This is a transformative moment for the sector.”
Frances McCann, CEO, Scotwest Credit Union said: “Today’s announcement is excellent news for credit unions and for the communities we serve.
“Raising the locality cap to ten million potential members and modernising the rules around family and retirement membership are exactly the kind of practical, meaningful reforms the sector has been asking for.”
“At Scotwest we see every day the difference a credit union can make to households that need an affordable alternative to high-cost credit. These changes will allow more credit unions to reach more of those people.”
Matt Bland, Chief Executive of ABCUL said: “This announcement marks an important milestone in the Government’s recognition of the vital role credit unions play in strengthening financial resilience and improving financial inclusion across Great Britain.
“Reforms to the common bond will enable credit unions to expand their reach, serve more communities and work together more effectively to deliver sustainable growth.
“As the Government’s Financial Inclusion Strategy moves into delivery, it is encouraging to see credit unions recognised as a central part of improving access to fair and affordable financial services.”
Chancellor confirms over £50 million for low income families who heat their homes with oil to help tackle surging prices.
The price of kerosene – the fuel used for heating oil – has been especially affected by the conflict in the Middle East and has risen faster than other fuels such as petrol and gas.
Government announces intention to regulate heating oil sector to introduce new consumer protections, alongside securing agreement with industry to quickly improve customer experiences.
Families are to benefit from over £50 million to help people pay for the rising cost of heating oil. With winter drawing to a close, and families struggling with the rising price of heating oils, this government is committed to helping ensure that vulnerable families are able to heat their homes and access hot water.
Scotland will receive £4.6 million.
The price of kerosene – the fuel used for heating oil - has been particularly impacted by the conflict in the Middle East and is currently double that of crude oil.
In Great Britain, unlike gas and electricity customers, those who heat their homes with oil are not covered by the energy price cap, meaning they are exposed to more immediate energy price hikes.
Many, including some of the most vulnerable households, will need to pay an upfront lump sum to top up their tanks in order to maintain their heating and hot water.
Chancellor of the Exchequer Rachel Reeves said: “Heating oil prices have spiked sharply, and I know that for families in rural communities that is a real and urgent problem.
”That’s why we’re putting over £50 million of support to help the people who need it most, including funding for the Northern Ireland Executive to deliver support in Northern Ireland where this issue hits hardest.”
Energy Secretary Ed Miliband said: “This government is committed to fighting people’s corner in tackling cost of living pressures. With this investment, alongside new measures to protect customers against any unfair practices, we are standing up for the British people.”
To bridge the gap, the Chancellor is announcing over £50 million of targeted financial support, helping low-income households in rural communities who have no choice but to top up their tanks at a time when prices have risen so significantly.
In England, funding will be distributed by local authorities via the Crisis and Resilience Fund (CRF), which comes into effect from 1 April, targeted areas with higher rates of oil heating.
This is a particular issue in Northern Ireland, where a greater proportion of homes rely on heating oil, and we have allocated £17 million to support them. England will receive £27 million, Scotland £4.6 million and Wales £3.8 million.
This funding has been allocated based on census data, reflecting where the greatest need is, and it will be allocated directly to the devolved governments, with the expectation that it will be used to support vulnerable households.
Heating oil is different from other sectors in the energy market as it does not have the same consumer protections and is not regulated by Ofgem. The government intends to introduce new consumer protections for heating oil customers and is rapidly exploring new ways to step in and ensure households are better protected.
This includes:
An agreement secured with industry on a strengthened Code of Practice to rapidly provide enhanced protections to customers, including greater flexibility on delivery volumes and improving price transparency and formalising a Priority Customers Register – meaning all customers who are vulnerable are eligible for prioritised support in times of disruption.
Introducing stronger consumer protections in the heating oil market, which could cover dispute resolution, a greater variety of repayment options for those facing hardship, greater price transparency and enhanced protections for vulnerable groups such as the elderly.
Supporting the Competition and Markets Authority’s plans to carry out a more comprehensive examination of the UK’s heating oil industry.
Exploring the creation of a new ombudsman or appointment of a regulator, such as Ofgem, to champion consumers, and taking powers to do so through the Energy Independence Bill.
Working with the Northern Ireland Executive to ensure that protections are fit for purpose for Northern Irish households, who are particularly reliant on heating oil.
In addition, the Chancellor earlier this week wrote to the Competition and Markets Authority (CMA) to ask that it remains vigilant across heating oil prices and supports CMA action to tackle unjustified price increases.
The government will not tolerate profiteering or unfair practices and urge customers to share any evidence of price manipulation with the CMA.
Vulnerable households who are facing immediate financial difficulties as a result of rising heating oil prices are encouraged to contact their local authority to find out what support may be available to them.
The Chancellor is expected to announce that 13 million pensioners are set to benefit from an above inflation rise to the State Pension next April.
Those on the full rate of the new State Pension are set to receive over £550 a year more.
Pensions boost comes ahead of the Budget where the Chancellor will take the fair choices to cut NHS waiting lists, cut national debt and cut the cost of living.
13 million pensioners are set to see their State Pension increase faster than inflation next April thanks to the Government’s commitment to the Triple Lock.
From next April the rate of the full new State Pension is expected to increase to just over £240 a week.
This is an increase worth over £550 a year, an extra £120 compared to what it would have been if it had been uprated only by inflation. The full basic State Pension is expected to rise by around an extra £440 a year.
Tackling the cost of living is at the centre of this week’s Budget, and this announcement comes following government action to freeze rail fares and prescription fees next year saving working families millions of pounds. Government is also cracking down on ticket touts that will cut costs for music lovers across Britain.
At the Budget the Chancellor will go even further to bring down bills, tackle inflation, and grip the cost of living.
Chancellor of the Exchequer Rachel Reeves said:“Whether it’s our commitment to the Triple Lock or to rebuilding our NHS to cut waiting lists, we’re supporting pensioners to give them the security in retirement they deserve.
“At the Budget this week I will set out how we will take the fair choices to deliver on the country’s priorities to cut NHS waiting lists, cut national debt and cut the cost of living.”
The government ‘is committed to supporting pensioners’, and this boost will ensure the State Pension remains the foundation of a secure retirement. The Triple Lock guarantees that the State Pension increases annually by the highest of inflation, average earnings growth or 2.5 per cent.
This comes alongside other support for the most vulnerable pensioners through Pension Credit, worth on average £4,300 a year, and Winter Fuel Payments for nine million pensioners in England and Wales with an income of, or below, £35,000 a year.
Chancellor spends £1 billion to enhance and repair run down transport infrastructure and futureproof England’s road network
Package also includes further £590 million to take forward the long-awaited Lower Thames Crossing, and follows record £15.6bn investment in city region transport announced ahead of the Spending Review.
Funding will ensure vital upgrades are made to tired bridges, flyovers and tunnels across Britain, supporting highly skilled job opportunities, delivering on the Plan for Change.
Drivers across the UK will benefit from major investments to improve vital road structures, alongside committing cash to finally deliver a new Thames Crossing, working with the private sector.
Across Great Britain, approximately 3,000 bridges are currently unable to support the heaviest vehicles, restricting access for agricultural and freight transport in regions, and slowing down journeys.
And nationally, the number of bridge collapses has also risen – a stark reminder of the need for urgent action to turn the tide on the decade of neglect.
The Structures Fund will inject cash into repairing run down bridges, decaying flyovers and worn out tunnels across Britain, and ensure other transport infrastructure is both more resilient to extreme weather events and to the demands of modern transport – making everyday journeys safer, smoother and more dependable.
The Government is also pledging a further £590 million to take forward the Lower Thames Crossing, the most significant road building project in a generation and a national priority- ending the painfully slow approach seen before.
The new crossing will cut frustrating congestion at Dartford, better linking up motorists and businesses in the Midlands and North with key ports in the South East, and spreading growth throughout the regions as outlined in the Plan for Change.
The Government will look to bring in private finance and expertise to support this major project.
These investments come as part of the new 10 Year Infrastructure Strategy, which will be published later this week, and sets out clear, achievable and robust vision for projects over the next decade of renewal.
This also comes swiftly after a record £15.6bn was announced at the Spending Review to enable local leaders to build long awaited projects like the Tyne and Wear Metro extension and the West Yorkshire Metro, and more investment to fund the TransPennine Route Upgrade and deliver East-West Rail.
The Government is also delivering direct funding to support growth across the UK – with funding for five new rail stations in South Wales, and financial backing for carbon capture storage in Aberdeenshire.
Chancellor of the Exchequer, Rachel Reeves, said: “When it comes to investing in Britain’s renewal, we’re going all in by going up against the painful disruption of closed bridges, crossings and flyovers, and ensure they’re fit to serve working people for decades to come.
“Today’s investment also goes even further and faster to spread growth by providing critical funding to take forward the Lower Thames Crossing – not just boosting connectivity in the South East, but ensuring a smoother, less congested passage of vital goods from Europe to our regions.
“This is a turning point for our national infrastructure, and we’re backing it with funding to support thousands of jobs and connect communities, delivering on our Plan for Change.”
Transport Secretary, Heidi Alexander, said: “We’re finally getting on with the Lower Thames Crossing — a crucial project to drive economic growth, that has been stuck in planning limbo for far too long.
“This project is essential for improving the resilience of a key freight route and is critical to our long term trade with Europe. It will speed up the movement of goods from South East England to the Midlands and the North, crucial to thousands of jobs and businesses.
“Our structures fund will make long-overdue investments to repair ageing structures across the country, speeding up journeys, restoring pride and delivering our Plan for Change to boost the economy and support regional growth.”
Capital investment today will not only address these immediate risks over the next five years, but create skilled jobs in construction, engineering and maintenance, support vital regeneration in local areas by improving connectivity, and boost local economies by improving access to jobs, education and services.
The government will set out more detail about how funding will be allocated shortly. This funding is additional to the funding local authorities will receive for highways maintenance, which will be set out in due course.
The block grant for the Scottish Government this year is £50 billion following Main Estimates 2025-26 published on Thursday
The Scottish Government already had the largest real terms spending review settlement in the history of devolution of £47.7 billion. Following revisions at the Spring Statement and Main Estimates, the Treasury has now confirmed the latest settlement is £50 billion.
Secretary of State for Scotland Ian Murray said: “The UK Government delivered the largest spending review settlement in the history of the Scottish Parliament, now Scots rightly expect to see that record finding deliver better results like lower NHS waiting lists, better attainment in Schools, more police on the beat and more housing.
“I was very concerned this week to see that attainment targets for Scottish schools have been reduced and housebuilding has fallen by 4,000, meanwhile police officer numbers are lower than when police Scotland was established and 800,000 Scots are on an NHS waiting list.
“Where the UK government has responsibility for public services, we are seeing NHS waiting lists fall, more housing being built and more bobbies on the beat, all part of our Plan for Change. This historic funding deal for the Scottish Government should be delivering similar results.
Chancellor pledges to work with regulators to develop ambitious reforms.
Today’s summit marks the first in a series of meetings with the regulators ahead of publishing action plan.
Reeves welcomes initial ideas from regulators to boost innovation and investment, but pushes for more ambition.
The CEOs of key regulators were urged to ‘tear down regulatory barriers’ that hold back economic growth at a summit in the Treasury yesterday.
In a meeting hosted by the Chancellor of the Exchequer and Secretary of State for Business and Trade, chief executives at watchdogs covering sectors including railways, water, energy, aviation were told that economic growth is the absolute top priority for the government, as part of the Plan for Change for put more money in people’s pockets.
The meeting was the first in a series following a joint letter from the Prime Minister, Chancellor and Secretary of State for Business and Trade in December, in which the government asked the regulators to each propose five reforms to support growth in the coming year. Over the coming weeks, 17 regulators will be called in to have their proposals scrutinised as the government leaves no stone unturned to deliver growth.
At yesterday’s meeting, the Chancellor told the regulators that they would have a key role to play in delivering growth by helping to create a regulatory environment that unlocks innovation and investment, supports businesses to thrive and allows much needed infrastructure to be built.
The regulators agreed with the Chancellor that they have a role to play in driving growth but highlighted that there are some barriers, including the need to balance growth with their other legal responsibilities.
The Chancellor noted that the regulators’ responsibilities had accumulated over time and said she was open to hearing about where this was preventing them from taking clear, consistent and balance actions to drive growth.
She emphasised the importance of leadership to deliver a mindset shift on regulation, calling on each of the CEOs in the room to institute cultural change based on helping to deliver growth instead of excessively focusing on risk.
The Chancellor also promised that the government would work with them to develop and deliver important reforms by playing its part, including by making time for legislation where it is needed or using the upcoming Spending Review, and noted the Prime Minister’s promise to rip up regulation that blocks investment to make the regulatory regime fit for the modern age.
The Chancellor was clear that while some of the proposals already put forward were promising, she wanted to see greater ambition and urgency to drive economic growth. She emphasised that fresh ideas were needed and noted that the Government will also ask industry to come forward with their own ideas to deliver a more growth supportive regulatory environment.
She highlighted some specific and promising ideas she had heard from the regulators today. These included: driving greater responsiveness to business demands, particularly on planning and license applications; grant funding administered by Ofwat to drive innovation in the water sector supply chain; energy tariff reform; increasing access to rail operator efficiency data and innovative drone solutions which would unlock growth in the public sector.
The regulators agreed to continue working with the government on their proposals reform ahead of publishing an action plan in Spring, and welcomed today’s strategic discussion.
The Chancellor finished the meeting by reiterating that leadership matters, noting that every regulator would have to play their part to improve living standards across the country.
Following the meeting, Chancellor of the Exchequer Rachel Reeves said: “There’s no substitute for growth. It’s the only way to create more jobs and put more money in people’s pockets, which is why it’s at the heart of our Plan for Change.
“Every regulator, no matter what sector, has a part to play by tearing down the regulatory barriers that hold back growth. I want to see this mission woven into the very fabric of our regulators through a cultural shift from excessively focusing on risk to helping drive growth.”
8,600 jobs fuelled across the UK by the Chancellor’s National Wealth Fund since July, with almost £1.6 billion of private investment unlocked, delivering on the Plan for Change.
Jobs and investment spread across UK’s growth sectors from clean energy to digital infrastructure, driving government’s number one mission to grow the economy
New deal also announced today for North Wales with £92 million committed to support crucial improvements to coastal flood defence barriers protecting business and homes.
Thousands of jobs have been fuelled by the Chancellor’s National Wealth Fund in the last six months, with almost £1.6 billion of investment unlocked, driving growth across all corners of the UK.
The Chancellor began work just days into office to establish a new National Wealth Fund (NWF) that would invest in the new industries of the future to create good jobs and opportunity across every part of the country. With £27.8 billion of firepower, the NWF will help drive the government’s Plan for Change and turbocharge growth across the country to raise living standards in every part of the United Kingdom.
The jobs that have been created will support the digital and clean energy sectors, including 6,500 expected to be created in the retrofit sector across the UK, with the NWF providing a financial guarantee that will see Lloyds and Barclays deliver £1 billion of funding to deliver improvements such as low carbon heating and insulation in social housing.
New figures reveal almost £1.6 billion of private investment has been leveraged into projects across the UK’s clean energy and growth sectors over the past six months. This includes to support faster broadband connections for thousands of businesses and households in Cornwall, Yorkshire, Lincolnshire and Cumbria, fuelling economic growth.
Millions of pounds have also been committed to help West Suffolk Council to decarbonise its buildings and transition its fleet to electric vehicles, alongside supporting the expansion of a successful rooftop solar scheme.
This innovative investment model has the potential to be replicated by other local authorities and means more businesses can benefit from low cost, low carbon electricity, supporting local businesses and the growth of the clean energy sector.
It comes as today, the NWF announces a loan of £92 million to support Denbighshire County Council’s crucial improvements to coastal flood defence barriers in Denbighshire, North Wales, protecting businesses and homes against the devastating impact of flooding, creating jobs and growth in the construction industry.
Chief Secretary to the Treasury Darren Jones said: “Growth is our national mission, and the cornerstone of our Plan for Change that will improve living standards and put more money in people’s pockets.
“And the National Wealth Fund is playing a vital part in delivering economic growth, securing over a billion of private investment since July in industries that turbocharge growth in our economy and create good quality jobs across the UK”.
The Chancellor announced in October how the NWF would drive long-term investment in Britain, working hand in hand with business to create new high skilled jobs right across the UK, helping make people better off.
To mobilise investment at pace, the NWF will expand on the UK Infrastructure Bank’s offer including additional financial instruments so it is more catalytic and will take on more risk to have a greater impact:
The NWF has more capital with £27.8 billion – inheriting UKIB’s £22 billion and having an additional £5.8 billion.
It has a renewed focus to support the delivery of the wider industrial strategy, and the Government’s clean energy and growth missions. At least £5.8bn of the NWF’s capital will focus on the five sectors announced in the manifesto: green hydrogen, carbon capture, ports, gigafactories and green steel.
The NWF will have increased resources and focus on conducting more outreach to identify expanded project pipelines and structure innovative transactions. It will have a strong regional mandate to unleash the full potential of our cities and regions.
Chancellor visiting Beijing for the first UK-China Economic and Financial Dialogue since 2019 – seeking stability in relationship with world’s second largest economy to achieve secure and resilient growth.
Visit delivers on commitment to explore deeper economic cooperation made by Prime Minister and President Xi at G20 in November.
Reeves will also raise difficult issues, including China’s support for Russia illegal war in Ukraine and concerns over constraints on rights and freedoms in Hong Kong.
Making working people across Britain secure and better off is ‘at the forefront of the Chancellor’s mind’ while in Beijing this weekend for a UK-China Economic and Financial Dialogue (EFD).
Rachel Reeves will meet with her counterpart, Vice Premier He Lifeng, in the Chinese capital today for a series of conversations around the financial services relationship between the two countries, support for safe trade and investment and the importance of cooperation on global issues like climate change.
She will be joined by Bank of England Governor Andrew Bailey, Chief Executive of the Financial Conduct Authority Nikhil Rathi, and senior representatives from some of Britain’s biggest financial services firms as she seeks outcomes that benefit our businesses, support secure and resilient growth in the UK, and finance tackling shared global challenges.
The Chancellor’s visit follows a meeting between Prime Minister Keir Starmer and President Xi Jinping at the G20 Summit last autumn, where they discussed deepening the economic and trade relationship shared by the UK and China, in order to yield mutual benefits, support growth, and have candid discussion on issues where our views differ. As part of this, the Chancellor is expected to raise constraints on rights and freedoms in Hong Kong and to urge China to stop its material and economic support for the Russian war effort in Ukraine.
This is part of the consistent, long term and strategic approach that the government is taking in managing the UK’s relations with China, rooted in UK and global interests. The government will co-operate where it can, compete where it needs to, and challenge where it must, including to protect our values and national security as the first duty of government.
Ahead of her visit, Chancellor of the Exchequer Rachel Reeves said:“Growing the economy and raising living standards is front and centre of this government’s Plan for Change. That growth must be secure, resilient, and built on stable foundations, including through careful pragmatic cooperation with international partners.
“By finding common ground on trade and investment while being candid about our differences and upholding national security as the first duty of this government, we can build a long-term economic relationship with China that works in the national interest.”
While in Beijing, the Chancellor will also visit Brompton’s flagship store. The enduring British bike brand is celebrating its 50th anniversary year, and its flourishing community in the Chinese capital as its foremost market is a major success story for UK exports to China.
In addition to building on the financial services relationship, the EFD will also seek to bring down barriers that British businesses face when looking to export or expand to China, supporting them to seize growth opportunities and follow in the footsteps of brands like Brompton, and other cornerstones of British culture and industry like Jaguar Land Rover, Unilever and Diageo – three companies whom Reeves will also meet with during her visit.
Reeves is also to visit Shanghai on Sunday to engage with representatives across British and Chinese business. Alongside London, the city is a leading global financial centre which has long been important for UK-China economic and financial links, including in financial services with the landmark financial market connectivity initiative between the London Stock Exchange and the Shanghai Stock Exchange entering its sixth year.
China is the world’s second largest economy and the UK’s fourth largest single trading partner, with a trade relationship worth almost £113 billion, and with exports to China supporting over 455,000 jobs in the UK in 2020.
UK stagflation crisis threat demands action
The UK economy is staring down the barrel of the stagflation gun, with stagnant growth and persistent inflation combining to create one of the most challenging financial environments in over a decade.
This is the stark warning from Nigel Green, CEO of deVere Group, as this week the 30-year gilt yield hit a staggering 5.25%—its highest point since the 2008 financial crisis—underscoring the scale of the issue.
He says: “Stagflation’s grip on the UK has been exacerbated by weak domestic growth, which under normal circumstances would prompt the Bank of England to lower interest rates.
“However, with inflation still uncomfortably high, policymakers find themselves in a precarious position, hesitating to make moves that could further weaken the pound and worsen price pressures.
Nigel Green continues: “For Chancellor Rachel Reeves, the situation is particularly dire. Her key fiscal rule—eliminating all non-investment borrowing by 2029—now hangs in the balance, as rising interest payments on debt eat into the Treasury’s capacity to act.
“Achieving this goal will demand either politically challenging tax increases or deep public spending cuts. Both measures will hurt economic growth, amplifying the stagflationary spiral.
“The rise in gilt yields signals growing investor caution about the UK’s economic outlook.
“Higher borrowing costs are creating ripple effects across sectors, from property to retail, as businesses and consumers alike face higher for longer interest rates. At the same time, the weakening pound, spurred by fears of stagnation, makes UK assets more attractive to international investors.
“For global investors, the UK’s predicament is not just a warning—it’s a call to action. Stagflation may erode domestic purchasing power, but it also opens the door to undervalued opportunities in key sectors, particularly for those with a long-term strategy.
“Fixed-income securities are more appealing given their higher yields, especially for those seeking safe havens in a turbulent global economy.”
While stagflation is a daunting challenge, it also forces innovation and adaptation.
“For investors with ties to Britain, this is the time to reassess portfolios, hedge against inflation, and identify sectors that can thrive in a stagflationary environment. History teaches us that industries such as energy, healthcare, and tech have shown resilience, even in periods of economic stagnation.
“The gilt market itself is worth watching closely. The recent yield spike suggests a shift in sentiment, but for those who act decisively, these higher yields could lock in significant returns over the medium term.
“Similarly, the weakening pound, while a burden for imports, is a boon for exporters and foreign investors looking to acquire UK assets at a relative discount.”
Nigel Green concludes: “The looming spectre of stagflation may sound like a warning bell, but it’s also a call for decisive action. The UK’s challenges are real, but so are the prospects for those who think globally and act strategically.”
