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.

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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.

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.

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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.”

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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.”

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 Israel Defence Forces (IDF) has admitted to a “serious offence” after a Sky News investigation analysed CCTV footage showing the moment an 80-year-old Palestinian grandmother was shot in the West Bank.

Halima Abu Leil was shot during a raid in Nablus. The grandmother died soon after.

During the course of the investigation, we noted that a blue vehicle marked as an ambulance and with a red light on its roof was used by IDF troops to enter the West Bank.

Our investigation stated: “Figures who appear to be Israeli military forces exit the ambulance in the foreground. They are equipped with helmets, backpacks, rifles, and other gear.”

The use of a marked medical vehicle for a security operation could be a contravention of the Geneva Convention and a war crime – as well as Halima’s killing.

The IDF has subsequently told Sky News: “On December 19, 2024, soldiers from the ‘Duvdevan’ unit took part in an operational mission to detain terrorists in Nablus.

“During the operation, an ambulance-like vehicle was used for operational purposes, without authorisation and without the relevant commanders’ approval.”

It added: “The use of the ambulance-like vehicle during the operation was a serious offence, exceeding authority, and a violation of existing orders and procedures.”

It also said the commander of the ‘Duvdevan’ unit was “reprimanded”.

However, it gave no update into the death of Halima, saying “the circumstances of the incident are being examined”.

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The United Nations Special Rapporteur on occupied Palestinian territory Francesca Albanese watched the CCTV video and told Sky News her death could be a “war crime”.

She said: “When I look at the footage, what emerges prima facie is that there were no precautions taken – within these operations whose legality is debatable – to avoid or spare civilian life.

“No principle of proportionality because there was wildfire directed at the identified target and ultimately no respect for the principle of distinction.

“So this was a murder in cold blood and could be a war crime as an extrajudicial killing.”

According to the United Nations Office Of Human Rights in occupied Palestinian territory, Israeli security forces and settlers have killed at least 813 mostly unarmed Palestinians, including 15 women and 177 children, since 7 October 2023.