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.
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.
More on Rachel Reeves
Related Topics:
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.
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.”
Please use Chrome browser for a more accessible video player
1:57
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.”
Please use Chrome browser for a more accessible video player
1:14
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.”
The former Labour MP, who now represents Coventry South as an independent, admitted she had launched the membership portal without her co-leader’s sign-off, but claimed she did so because she had been “sidelined” by a “sexist boys club”.
Her actions led to Mr Corbyn issuing his own statement, in which he urged members of the party – which has been given the interim name of Your Party – to ignore an “unauthorised” email urging them to become paid members and that legal advice was being taken.
In a fresh statement issued on Sunday evening, Ms Sultana acknowledged her supporters had been left feeling “demoralised” by the saga.
“For the sake of the party, and as an act of good faith, I will not be pursuing legal proceedings despite the baseless and unsubstantiated allegations against me,” she said.
“I know many people are feeling demoralised – I share that feeling. We find ourselves in a regrettable situation, but my motivation has always been to ensure the collective strength of our movement, put members first and build the genuinely democratic conference and socialist party we so urgently need.”
She added: “I am determined to reconcile and move forward. I am engaged in ongoing discussions with Jeremy, for whom, like all socialists of my generation, I have nothing but respect.”
X
This content is provided by X, which may be using cookies and other technologies.
To show you this content, we need your permission to use cookies.
You can use the buttons below to amend your preferences to enable X cookies or to allow those cookies just once.
You can change your settings at any time via the Privacy Options.
Unfortunately we have been unable to verify if you have consented to X cookies.
To view this content you can use the button below to allow X cookies for this session only.
Please use Chrome browser for a more accessible video player
1:45
What is happening at Your Party?
Despite her current attempts to repair the row, Your Party reported itself to the Information Commissioner’s Office last week after the “false membership” system was “unilaterally launched” by Ms Sultana – which it said was its duty under the law.
Questions remain over the handling of the data, which, as outlined in Your Party’s privacy notice, is owned by the Peace and Justice Project, spearheaded by the former Labour leader and independent activist Pamela Fitzpatrick, who are listed as the directors on Companies House.
The Coventry MP said in a statement after the row broke out that “at no point was members’ data misused or put at risk” and that the portal was “properly launched in accordance with the party’s roadmap”.
The ICO watchdog, which upholds information rights in the public interest, can issue fines up to £17.5m or 4% of global turnover, or pass fraud and negligence cases to police.
A spokesperson for the ICO told Sky News on Friday: “We can confirm we have received a report and are assessing the information provided.”
Sir Ed Davey has branded Elon Musk a criminal and called for him to be prosecuted for “allowing online harm to children” on his social media platform X.
The Lib Dem leader told Sky News’ Sunday Morning with Trevor Phillips the billionaire owner of X, formerly Twitter, is “inciting violence” and his social media platform is actively failing to protect children.
Sir Ed, speaking from the Lib Dem conference in Bournemouth, said Mr Musk could be prosecuted under the Online Safety Act, under which social media companies have a legal duty to protect children from harmful content and their directors are liable for criminal prosecution for breaching it.
Image: Elon Musk. Pic: Reuters
Asked if he is calling Mr Musk a criminal, Sir Ed did not miss a beat as he said: “Yes.
“Not just because of the awful things he’s done in inciting violence, and, for example, he says a civil war in our country is inevitable, that our democratically elected government should be overthrown.
“They were bad enough. But on his platform, they’re examples of adverse, pushing people on self-harm, on grooming, even selling videos showing paedophile acts, of child sex abuse acts and I think he should be held to account for them, him personally and his business.
“Ofcom now has the powers under the Online Safety Act.”
More on Elon Musk
Related Topics:
He said if Mr Musk comes to the UK, he should be arrested.
Please use Chrome browser for a more accessible video player
0:38
Sir Ed Davey enters conference with marching band
Mr Musk was accused of inciting violence during a march organised by Tommy Robinson in London last week.
He told the protest via video link: “This is a message to the reasonable centre, the people who ordinarily wouldn’t get involved in politics, who just want to live their lives. They don’t want that, they’re quiet, they just go about their business.
“My message is to them: if this continues, that violence is going to come to you, you will have no choice. You’re in a fundamental situation here.
“Whether you choose violence or not, violence is coming to you. You either fight back or you die, that’s the truth, I think.”
Image: Sir Ed Davey said Elon Musk should be arrested
Sir Ed said it is “shocking” that Mr Musk removed some of X’s child safety teams when he took over Twitter in 2022 and accused him of just being “interested in his bank account”.
“I’m interested in the safety of our children, and it is quite wrong that his business puts on these adverts,” said the Lib Dem leader.
“It’s disgusting and I hope everybody will agree with me and the Liberal Democrats that we should take really strong action against him.”
After Mr Musk acquired Twitter, many of its child safety staff were laid off or resigned, and the platform’s trust and safety council was disbanded.
Child protection experts have accused Mr Musk of leading a “race to the bottom on safety”.
Image: Elon Musk with Donald Trump in the Oval Office. Pic: AP
Ofcom, the UK’s independent media regulator, which has the power to prosecute directors of social media platforms under the Online Safety Act, has launched an investigation into X’s handling of child sexual abuse content.
This is not the first time Sir Ed has hit out at the world’s richest man, as he called for the US ambassador to be summoned in February “to ask why an incoming US official is suggesting the UK government should be overthrown”.