Keir Starmer has ‘full confidence’ in Rachel Reeves despite pressure on UK Chancellor

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

Amid falling business confidence, criticism of the October budget and market jitters, the prime minister refused to answer questions on Monday about whether he was willing to pay the bills. Reeves They will be chancellors for the whole parliament.

“Rachel Reeves is doing a fantastic job – she has complete confidence,” he told reporters in London. “She has the full confidence of the whole party.”

Reeves, who returned from a visit to China on Monday, is under pressure to show that she has a growth strategy after growth. The UK economy In the year By the end of 2024, inflation is declining.

Prime ministers typically refuse to give any cabinet minister a job guarantee for the whole of parliament, but the Conservatives were caught off guard by Starmer’s refusal to answer questions about Reeves’ longevity in the Treasury.

Last November, Starmer’s spokesman, David Lammy, suggested that it seemed likely that he would serve the full term – which is expected to run until 2029 – as foreign secretary. “Yes, he is the secretary of state,” a spokesman said at the time.

Shadow Treasury Secretary Gareth Davies said: “The fact that Keir Starmer has not repeatedly said that Rachel Reeves will remain chancellor speaks volumes.

Meanwhile, as the government struggles to stay within its own borrowing rules, Starmer insisted ministers must be “aggressive” to rein in public spending.

“In terms of an aggressive approach to money and spending, yes, we will be aggressive,” Starmer said. “We have clear fiscal rules and we abide by those fiscal rules.”

Recent turmoil in the bond market has pushed up government borrowing costs, raising concerns that Reeves’ promise to balance day-to-day spending with tax receipts by 2029 could blow a hole.

UK borrowing costs have risen sharply since October as global bond sales fueled higher borrowing and fears of a slowdown in the UK economy. They added more on Monday, with the 10-year bond rising 0.04 percentage point to 4.87 percent, hitting a 16-year high last week. When the price goes down, the production goes up.

Sterling, caught up in the gilt sell-off, lost another 0.4 percent against the U.S. dollar, which recovered on Monday, to $1.215 in late afternoon trade and losses for the year more than 2.8 percent. Worst performance among major global currencies.

Dean Turner, an economist at UBS Wealth Management, said Reeves was under pressure to act because expecting “the whole class to pass” was not seen as a “credible” response by investors.

The chancellor is expecting new information this week that will further explain the government’s efforts to strengthen the economy.

December’s official inflation numbers will be released on Wednesday, with the consumer price index expected to show 2.6 percent growth last month, unchanged from November’s reading.

November’s gross domestic product numbers are due next day, a Reuters poll showed a slight increase of 0.2 percent.

Higher yields since the Budget have not only dampened the growth outlook but are likely to add around £12bn to annual government interest costs, said Rob Wood at Pantone Macroeconomics.

If it goes ahead, it would wipe out £9.9bn of the Chancellor’s core of her current budget rule and strengthen calls for the Chancellor to take action in March to further cut public spending.

“Reeves should tighten policy in the spring,” he said in a memo. But she can gradually reduce spending plans over five years.