Keir Starmer has “full confidence” in Rachel Reeves despite pressure from the UK Chancellor

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Sir Keir Starmer has declared his “full confidence” in chancellor Rachel Reeves, but refused to say whether she would still be in her job at the next election.

After a slump in business confidence, criticism of the October Budget and market turmoil, the Prime Minister refused to answer questions on Monday about whether Reeves he would be the chancellor of the whole parliament.

“Rachel Reeves is doing a great job – she has my full confidence,” he told a news conference in London. He has the full confidence of the entire party.

Reeves, who returned on Monday from a visit to China, is under pressure to show he has a plan to grow after UK economy decreased at the end of 2024 as inflation rises.

The prime minister usually refuses to give a job guarantee to any cabinet minister for the rest of parliament, but the Conservatives seized on Starmer’s refusal to answer a question about Reeves’ longevity in the Treasury.

They noted that Starmer’s spokesman had previously suggested that David Lammy would serve a full term – expected to run until 2029 – as foreign secretary. “Yes, he is the foreign secretary,” said the speaker at the time.

Shadow Chancellor of the Exchequer Gareth Davies said: “The fact that Keir Starmer has repeatedly refused to say whether Rachel Reeves will remain chancellor speaks volumes.”

Meanwhile, Starmer has confirmed that ministers must be “brutal” about spending public money as the government struggles to stay within its borrowing rules.

“In terms of a ruthless approach when it comes to funding and spending, yes, we will be ruthless,” Starmer said. “We have clear financial rules, and we will keep those financial rules.”

Recent turmoil in the bond markets has raised the cost of government borrowing, threatening to close the gap on Reeves’ promise to balance daily spending and tax receipts by 2029.

Borrowing costs in the UK have risen sharply since the October Budget sale as global bond yields collided with fears of over-borrowing and the UK’s shrinking economy. They rose further on Monday, with the 10-year bond yielding 0.04 points to 4.87 percent, heading to a 16-year high last week. Yields rise when prices fall.

Sterling, buoyed by a sell-off in gilts, lost another 0.4 percent on Monday against the recovering U.S. dollar, taking the pound to $1.215 in afternoon trade, and its annual loss of more than 1 percent. 2.8 – the worst performer among the world’s major currencies.

Dean Turner, an economist at UBS Wealth Management, said Reeves is coming under pressure to act, as waiting in the “hope that the whole event is over” will not be seen by investors as a response ” faithful”.

The chancellor is waiting for new information this week that will shed more light on the government’s efforts to boost the economy.

Official inflation numbers for December will be released on Wednesday, which are expected to show annual growth in the consumer price index was 2.6 percent last month, unchanged from reading in November.

GDP numbers for November are due out next day, with a Reuters poll pointing to a slight rise of 0.2 percent.

Higher yields since the Budget will not only dampen growth prospects, but are likely to add around £12bn to annual government spending, according to figures by Rob Wood at Pantheon Macroeconomics .

If supported, they would clear the chancellor’s entire £9.9bn budget against his current budget bill, underscoring calls for the chancellor to act as soon as March to cut public spending.

“Reeves will have to finalize the plan in the spring,” he said in the letter. “But he will reduce the cuts gradually over the course of five years”.