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Sir Keir Starmer has said the Treasury will be “ruthless” in cutting government spending as market turbulence continues.

Responding to a question about the economic situation from Sky News’ political editor Beth Rigby, he said: “The number one mission of this government is economic growth.

“And that was run through the budget, but there’s much more that we’re doing on economic growth, pulling those levers of change.”

Both long-term 30-year and the benchmark 10-year government borrowing costs were up on Monday morning, with the 30-year effective interest rate (the gilt yield) reaching a new high of 5.47% – a rate not seen since mid-1998.

The 10-year borrowing cost reached 4.86%, below the 2008 high recorded last Thursday but at the same levels last seen around the global financial crash.

Politics latest: Chancellor urged to hold emergency bank summit

That pushes up costs for the government, with the chancellor put in a position where she could have to break her self-imposed fiscal rules by failing to bring debt down and balance the budget.

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Sterling, which can reflect investors’ confidence in the UK and overall economic health, was also down to a low not seen since October 2023, with £1 buying $1.21.

Money blog: Traders bet on pound dropping 8%

The dismal economic outlook has prompted warnings mortgage rates could rise in the coming weeks as lenders respond to the turmoil.

In what could be seen as further misery for the British people, the prime minister refused to rule out government spending cuts as he said the Treasury was right to be “ruthless” in cutting spending.

A spending review, due later this year, is expected to require government departments to make efficiency savings worth 5% of their budgets.

Sir Keir told a news conference: “We will be ruthless, as we have been ruthless in the decisions that we’ve taken so far.

“We’ve got clear fiscal rules, and we’re going to keep to those fiscal rules.”

He said the government had “inherited a real mess” of an economy from the Conservative government.

But, he said the government is “going to stick to the fiscal rules”.

“That is a very important thing,” he said.

“We’re determined to bring about that economic stability. And that’s why the fiscal rules are absolutely, absolutely central to what we do.”

Read more:
Rachel Reeves facing pressure but people should give her more time, Wes Streeting says
Former PM says Reeves has been ‘rumbled’ by market turmoil

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Why is the UK economy in big trouble?

Sir Keir also twice avoided answering whether Rachel Reeves will still be chancellor by the next election in 2029 in the wake of the dismal economic outlook.

“Rachel Reeves is doing a fantastic job,” he said, but would not say if she would remain in post.

“She has my full confidence, she has the full confidence of the entire party.

“She took the tough decisions.”

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Chancellor’s ‘pragmatic’ approach to China

The Conservatives jumped on Sir Keir failing to confirm if Ms Reeves would still be in the job at the end of this parliament.

Leader Kemi Badenoch said: “The prime minister just refused to back his chancellor staying in her job.

“Keir Starmer and Rachel Reeves have driven Britain’s economy into the ground. The markets are in turmoil and business confidence has crashed, yet the chancellor is nowhere to be seen.

“Labour promised stability and instead the City minister is mired in corruption investigations and the chancellor is hanging on by her fingernails.”

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Indian authorities seize $190M in crypto tied to BitConnect Ponzi scheme

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Indian authorities seize 0M in crypto tied to BitConnect Ponzi scheme

Indian authorities have seized nearly $190 million worth of crypto tied to the notorious BitConnect Ponzi scheme, which collapsed in 2018.

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‘Once in a generation moment’: Starmer vows to ‘keep US and Europe together’ amid Russia threat

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US officials heading to Saudi Arabia for Russia-Ukraine peace talks

The prime minister has spoken of a “once in a generation moment” for the UK, US and Europe to work together and warned against NATO “divisions” – as two senior American officials head to Saudi Arabia for peace talks between Russia and Ukraine.

Sir Keir Starmer said the UK will “work to ensure we keep the US and Europe together” amid the threat faced from Russia.

His comments came after the Ukrainian president cautioned: “The old days are over when America supported Europe just because it always had.”

Earlier on Saturday, US officials confirmed Europe would not be involved in the upcoming peace talks between Russia and Ukraine.

Analysis: Peace talks risk short-term win that rewards Putin

Washington also sent a questionnaire to European capitals to ask what they could contribute to security guarantees for Kyiv.

“It’s clear Europe must take on a greater role in NATO,” said Sir Keir on Saturday night.

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“We cannot allow any divisions in the alliance to distract from the external enemies we face.”

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Zelenskyy warns against the ‘danger’ of the Russian army

The French president is thought to be convening crisis talks between European leaders and NATO, which the prime minister will attend.

Sir Keir will then take messages from that meeting to Washington DC when he meets US President Donald Trump the week after, according to Downing Street sources.

During a talk at a security conference in Munich, Poland’s foreign minister Radosław Sikorski said he was “very glad that President Macron has called our leaders to Paris” to discuss “in a very serious fashion” the challenges posed by Mr Trump.

Meanwhile, US national security adviser Mike Waltz and special envoy Steve Witkoff are thought to be going to Saudi Arabia for peace talks between Ukraine and Russia, according to two sources familiar with the matter who spoke to Sky News’ US partner network NBC News.

On Wednesday, Mr Trump said there had been an agreement to begin negotiations about ending the war in Ukraine, after holding phone calls with Russia’s Vladimir Putin and Ukraine’s Volodymyr Zelenskyy.

The Ukrainian president alluded to the conversations at the Munich Security Conference on Saturday, suggesting Europe should be playing a role in the negotiations as well.

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‘We need a European army’

“Ukraine will never accept deals made behind our backs without our involvement, and the same rule should apply to all of Europe,” Mr Zelenskyy said.

“The old days are over when America supported Europe just because it always had.”

He told world leaders it is time for the creation of an “armed forces of Europe”, adding his army was “not enough”.

Following his call with President Putin, Mr Trump posted on Truth Social saying: “We both agreed, we want to stop the millions of deaths taking place in the War with Russia/Ukraine.”

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‘Unlikely’ Ukraine gets old borders back

Mr Trump had told White House reporters he did not see any way “that a country in Russia’s position” could allow Ukraine to join NATO and that it was unlikely Ukraine would get all of its occupied land back.

It comes after Sir Keir told Mr Zelenskyy in recent days that Ukraine was still on an “irreversible path” to joining NATO.

However, on Saturday, the US special envoy for Ukraine Keith Kellogg said peace talks could focus on territorial concessions from Russia and targeting Mr Putin’s oil revenues.

“Russia is really a petrostate,” he said as he suggested Western powers needed to do more to enforce sanctions on Russia.

Mr Zelenskyy said the main issue in peace talks was to “not allow everything to go according to Putin’s plan”.

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Tether working with US lawmakers to shape stablecoin policy: report

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Tether working with US lawmakers to shape stablecoin policy: report

According to data from CoinMarketCap, Tether has a market capitalization of over $142 billion — making it the largest stablecoin issuer.

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