UK Finance Minister Rachel Reeves: November budget will respond to the global challenges we face

U.K. Finance Minister Rachel Reeves has reiterated her committedness to the government's self-imposed fiscal rules, but said it indispensable beryllium honorable with the nationalist astir the challenges the state faces.

Speaking to CNBC's Karen Tso connected the sidelines of the IMF's Annual Meeting successful Washington, D.C., connected Friday, Reeves cited the Russia-Ukraine conflict, the tensions successful the Middle East, and the interaction of planetary commercialized barriers arsenic cardinal challenges.

"The cardinal happening for maine is that arsenic Chancellor, I'm determined ... to beryllium honorable with radical astir the challenges that we face," she told Tso. "I volition respond to those astatine the budget."

On Nov. 26, Reeves volition present her 2nd Autumn Budget since becoming Chancellor of the Exchequer. The policies announced successful the upcoming fund travel arsenic the U.K. grapples with a faltering economy, inflated prices and elevated authorities borrowing costs.

Reeves would not beryllium drawn connected idiosyncratic measures successful the budget, specified arsenic the anticipation of a slope tax, but said she wanted the U.K. to beryllium competitory for businesses to "start up, to standard up and to grow."

"We privation Britain to beryllium seen globally arsenic the spot to trade, the spot to invest, the spot to bash business, and the spot to bring planetary talent," Reeves said.

She added that the U.K.'s fiscal regulators indispensable instrumentality into relationship growth, and not conscionable risk.

Reeves has travel nether sustained unit since past year's Autumn Budget, when she announced strict rules that constricted the government's country for maneuver connected spending and borrowing. Under her fiscal rules, day-to-day authorities spending indispensable beryllium funded by taxation revenues and not borrowing, and Reeves has besides pledged to guarantee nationalist indebtedness is falling arsenic a stock of economical output by 2029-30.

Earlier this week, however, she hinted that successful bid to conscionable these conditions, she whitethorn person to interruption an earlier manifesto pledge not to rise taxes for moving people. Her different options are breaking her ain fiscal rules oregon uncovering much ways to slash the government's outgoings.

All of those options would beryllium unpopular with voters.

Previous efforts to chopped the country's payment measure were thwarted erstwhile lawmakers wrong Reeves' ain enactment refused to backmost her plans, resulting successful concessions that effectively wiped retired £5 cardinal ($6.7 billion) of savings.

Last year's tax raid connected businesses besides faced pushback, with galore firms saying they were reluctant to prosecute staff arsenic a result.

Breaking her ain self-imposed fiscal rules, meanwhile, could spook fiscal markets. When questions arose earlier this twelvemonth astir Reeves' aboriginal wrong the government, bond markets staged a drastic reaction that suggested investors were keen for her to stay successful her station and instrumentality to the rules.

With the U.K.'s 30-year authorities enslaved yields trading astatine good implicit 5%, the country's authorities has the highest semipermanent borrowing costs of immoderate G-7 nation.

— CNBC's Holly Ellyatt contributed to this report.