Sir Keir Starmer has refused to guarantee Rachel Reeves long-term future as the Chancellor as the gilts soar which has not been seen since 2008.
On Monday the pound plummeted to a 14-month low and fell another 0.6% to 1.21 US dollars, this is the lowest level since 2023.
Starmer was asked if Rachel Reeves will still be the Chancellor at the next general election, he said that he has “full confidence” in her and she is doing a “fantastic job,” but dodged the question if she will remain in No 11 Downing Street.
GB News’s Political Editor Christopher Hope asked, “Is the three-year wait for the benefits of AI too long to help the economy now? The pound is down, the economy is flatlining.
“You know this already. What’s your plan? Will you cut the benefits bill? And will Rachel Reeves be your Chancellor at the next general election?”
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Starmer replied, “We’re going to stick to the fiscal rules. That is a very important thing that we’ve said throughout.
“We set out those fiscal rules very early on in the day because we knew that the missing ingredient in recent years has been economic stability.
“We’re determined to bring about that economic stability. That’s why the fiscal rules are absolutely central to what we do. The changes we’re bringing about, whether it’s industrial strategy, planning, energy, all of those are designed to ensure that we get the growth that we need.
“That’s why I’m confident in our mission for growth. I’m completely confident in my team. We never pretended, nor would anybody sensibly argue, that after 14 years of failure, you can turn around our economy and our public services before Christmas.
“Before the election, I said it’s not going to be possible to do this in six months. It’s going to take time. The question is, are you creating the conditions? Do you have the determination and are you pulling the right levers for growth?
“We are doing all of those underpinned by our fiscal rules.”
Gareth Davies MP, Shadow Financial Secretary, said, “Labour are trying to insist that everything is fine, but the fact that Keir Starmer has repeatedly refused to say whether Rachel Reeves will remain as Chancellor speaks volumes.
“The Prime Minister is looking for a scapegoat but this crisis was made in Downing Street by Rachel Reeves.
“The markets and businesses are watching, Labour promised stability and confidence but they have lost control. They must take action to reverse before this gets worse for families.”
Kathleen Brooks, research director at XTB, said, “The bond market is attempting to intimidate Chancellor Rachel Reeves into forcing the UK to live within its means.
“We think the bond market will get its way.
“The Labour Government may well get the UK on a secure fiscal footing, but it may not do it in the way it had wished for when it came to power last year.
“In 2025, public sector spending is out. Rachel Reeves needs to acknowledge this before the bond market will calm down.”
