Chancellor Rachel Reeves and Tory leader Kemi Badenoch (Image: GETTY)
Sir Keir Starmer twice refused to say if will still be Chancellor at the next election.
The Prime Minister insisted he had “full confidence” in her but stopped short of confirming she would remain in No 11 for the duration of the parliament.
Sir Keir was asked “yes or no” if Ms Reeves would still be in the Treasury in 2029 after he delivered a speech on artificial intelligence in London but dodged the question.
Pressed again, he said: “Rachel Reeves is doing a fantastic job. She has my full confidence. She has the full confidence of the entire party.”
It comes as the Chancellor is facing intense pressure over soaring government borrowing costs, while the value of the pound has dropped.
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Prime Minister Sir Keir Starmer (Image: Getty)
Conservative Party leader Kemi Badenoch said Ms Reeves was “hanging on by her fingernails”.
She said: “The Prime Minister just refused to back his Chancellor staying in her job.
” 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.”
Reform deputy leader added: “ may now try and distance himself from Rachel Reeves but the reality is, this is his economic agenda and this his choice for Chancellor.
“The fact is that Labour have no plan for growth, no plan for jobs and simply no plan at all for the economy.
“Only Reform UK know how to cut waste properly, cut burdensome regulations seriously and cut taxes effectively to get the economy firing once again.”
Downing Street has previously indicated that Foreign Secretary David Lammy would serve for the full parliament.
Sir Keir also insisted that the Government would meet its “fiscal rules” including requiring day-to-day spending to be met from revenues rather than further borrowing.
But rising borrowing costs could force Ms Reeves to either slash spending or hike taxes further – which she had previously ruled out – in order to balance the books when the Budget watchdog gives its updated forecast in March.
The PM said: “We’re going to stick to the fiscal rules. That is a very important thing that we’ve said throughout.”
He said changes to planning rules, the industrial strategy and embracing AI would fuel growth.
Sir Keir went on: “That is why I’m confident in our mission for growth and I’m confident, completely confident in my team.”
But he added: “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.”
It comes as the pound fell to a fresh 14-month low today, slumping another 0.6% to 1.21 US dollars.
UK government bonds – also known as gilts – continued to see 10-year yields hit highs not seen since 2008, at 4.9%.
The yield on 30-year gilts also hit new 27-year highs, up five basis points at 5.5% at one stage in early trading before easing back to settle at around 5.4%.
Yields are a key indicator of market confidence, moving inversely to bond prices.
They rise when investors are less willing to own the debt, meaning they will pay a lower price for the bonds.