HBA1C Rising

The problem is usually too many carbs causing our pancreas to produce ever increasing amounts of insulin. The high insulin levels cause our insulin resistance to worsen and our ability to deal with the carbs also suffers, causing higher blood sugar levels, a rising Hba1c and a need for our pancreas to produce even more insulin. It's a vicious circle and the reason why most dr's think that T2 is progressive.
Cutting carbs reduces blood sugar levels which lowers the amount of insulin our pancreas needs to make. Less insulin in our system will hopefully improve our sensitivity and our insulin resistance will improve.
Exercise is fantastic and will help to burn off some of that sugar, but it won't stop your pancreas pumping out insulin in response to carbs, the only way to reduce your insulin levels is not to eat the carbs in the first place. You can't outrun carbs, they will always catch you eventually.