Reeves in spotlight after gilt yields jump
30year government borrowing costs highest since 1998
Sterling falls along with bond prices
Market moves add pressure on Reeves to cut spending
Government promises iron grip on public finances

LONDON, Jan 9 Reuters Rachel Reeves is facing her first major test as Britain39;s finance minister after the government39;s borrowing costs jumped sharply this week and the pound tumbled, potentially forcing her to cut future spending.

The Treasury said late on Wednesday that it would maintain an iron grip on the public finances in response to a twoday selloff in debt markets that pushed the yield on 30year British government bonds to a 26year high.

The value of the pound fell along with gilt prices, prompting some comparisons with the 2022 minibudget crisis that forced former prime minister Liz Truss out of Downing Street although this week39;s market moves have been less sharp.

Gilt yields rose again in early trade on Thursday while the pound was headed for its biggest threeday drop in nearly two years.

Investors, already on edge about the incoming administration of U.S. Presidentelect Donald Trump, are worried about the combination of high borrowing in Britain planned by Reeves and Prime Minister Keir Starmer and the impact of their higher taxes for business.

The launch last October of the new Labour government39;s programme for more investment in public services and infrastructure to speed up economic growth coincided with a…