Rachel Reeves told to stop ‘hiding in China’ and stop pushing UK back to the 70s

Chancellor Rachel Reeves has been told to stop “hiding in China” amid warnings she risks pushing Britain into 1970s-style economic chaos.

She is facing calls to unveil “emergency action” in the wake of soaring borrowing costs and a fall in the value of the pound.

Experts want her to cancel tax hikes which are squeezing businesses and warned of the danger of an “economic doom loop” with the UK entering a “vicious cycle of economic decline”.

Shadow Chancellor Mel Stride said she had her “priorities badly wrong”.

He said: “Whilst she’s absented herself on the far side of the world her economic decisions here are pivoting us back towards the 1970s, with borrowing costs soaring, stagnant inflation and growth crumbling. The Chancellor’s place should be fixing this mess of her own making. She should get on a jet and come straight back to the UK.”

Reform UK’s Rupert Lowe wants her to appear before MPs without delay and said that she and Sir Keir Starmer had “put a bullet through the heart of entrepreneurial, aspirational Britain”.

He said: “She has driven the economy to a cliff-edge. MPs must be given the opportunity to grill the Chancellor on her incompetence. Hiding in China is not acceptable.”

Ms Reeves defended her visit to China and said agreements coming out of the trip were worth £600million to the UK economy over the next five years. The Treasury said she used her meetings to raise concerns about human rights and forced labour.

But there is cross-party alarm at economic turmoil which saw the cost of borrowing over a decade reach its highest level since 2008.

The Chancellor has pledged to get debt falling as a share of national income by the end of this parliament and Ms Reeves told reporters in China her fiscal rules are “non-negotiable” and she will “take actions” to ensure they are met.

Daniel Herring of the Centre for Policy Studies urged her to resist the temptation to “raise taxes rather than rein in public spending”, saying this push the country “towards an economic doom loop of higher taxes and reduced business activity”.

SNP Westminster leader Stephen Flynn demanded she “urgently come to parliament and outline what emergency action she will take to reverse the damage caused by the Labour government’s Budget”. And Liberal Democrat Treasury spokeswoman Daisy Cooper said she should “come back now” to tackle the “crisis in the markets and announce a serious plan for growth”.

Julian Jessop of the Institute of Economic Affairs warned that “businesses and investors have lost confidence in the new Government’s economic policies”. Maxwell Marlow of the Adam Smith Institute said investors are “turning their backs on the pound” and urged the Chancellor to cancel taxes on businesses “before further market and economic chaos ensues”.

John Longworth, the former director-general of the British Chambers of Commerce who chairs the Independent Business Network had a grim assessment of the challenges facing Ms Reeves and the country.

He said: “The Chancellor’s incompetent management has led to low growth, high borrowing and as a consequence there will be higher taxes and more debt. We are entering a vicious cycle of economic decline comparable with the 1970s.

“This Government needs to go before stagflation takes hold.”