Rachel Reeves, UK Chancellor of the Exchequer, on the November Budget

British Finance Secretary Rachel Reeves reiterated the government’s commitment to self-imposed fiscal rules, but said the country must be honest with the public about the challenges it faces.

Speaking to CNBC’s Karen Tso on the sidelines of the IMF’s annual meeting in Washington, D.C., on Friday, Reeves cited the Russia-Ukraine conflict, tensions in the Middle East and the impact of global trade barriers as key challenges.

“What’s important to me is that, as prime minister, I am determined to be honest with the public about the challenges we face,” she said. We will respond within your budget.

On November 26, Reeves will submit his second fall budget since becoming finance minister. The policies announced in the upcoming budget come as Britain grapples with a weak economy, rising prices and rising borrowing costs for the government.

Mr Reeves said he was not interested in specific policies in the Budget, such as a possible bank tax, but wanted to ensure the UK was competitive for businesses to “start, scale and grow”.

Mr Reeves said: “We want the UK to be seen globally as a place to trade, a place to invest, a place to do business and a place to bring world-class talent.”

He added that UK financial regulators need to consider growth as well as risk.

Mr Reeves has been under continued pressure since last autumn’s budget, when he announced tough rules limiting the government’s room for maneuver on spending and borrowing. Under Mr. Reeves’ fiscal rules, day-to-day government spending must be financed by tax revenue rather than debt, and Mr. Reeves has also pledged to ensure that public debt as a share of economic output falls by 2029-30.

But earlier this week he hinted that meeting these conditions may require him to break his previous manifesto pledge not to raise taxes for working people. Her other options are to break her own fiscal rules or find more ways to cut government spending.

Both of these options are likely to be unpopular with voters.

If the prime minister breaks his self-imposed fiscal rules, it could spook financial markets. When questions arose about Reeves’ future within the government earlier this year, the bond market reacted dramatically, suggesting investors wanted her to remain in post and abide by the rules.

What is England? 30 year government bond yield Trading at well over 5%, the country’s long-term borrowing costs are the highest among the G7 countries.

Mr. Reeves declined to comment on bond trends, but said the market could see the government continuing to adhere to fiscal rules, adding that it remains on the path to fiscal consolidation.

“We know that budget deficits have become too high over the past few years, and as chancellor, I am determined to reduce these borrowing costs, reduce debt and ensure we have a growing economy based on a foundation of fiscal responsibility,” he added.

Previous efforts to cut the country’s welfare bill were thwarted by MPs in Ms Reeves’ own party who refused to back her plans, resulting in concessions that effectively wiped out 5 billion pounds ($6.7 billion) in savings.

Last year’s tax increases on businesses also met with a backlash, with many companies saying they were reluctant to hire employees as a result.

—CNBC’s Holly Ellyatt contributed to this report.