Prime Minister Sir Keir Starmer has publicly reaffirmed his commitment to keeping Chancellor Rachel Reeves in her post until the end of the current parliament, despite new polling showing Nigel Farage’s Reform UK almost neck and neck with Labour and pushing the Conservatives into third place.
Reeves, who cut short a trip to China to face growing internal criticism, was accused of failing to contain a surge in government borrowing costs and a sharp fall in the pound. Labour MPs privately fear that her October budget—featuring steep tax rises and increased public spending—will hamper economic growth and could jeopardise the Government’s fiscal targets.
Starmer initially offered only guarded assurances of his “full confidence” in Reeves. However, amid speculation over her future, Downing Street confirmed that she would remain chancellor until 2029. “He will be working with her in the role of chancellor for the whole of this parliament,” said a No 10 spokesman.
The pledge of loyalty came as a YouGov poll showed Labour’s vote share sliding to 26 per cent, a significant drop from the 34 per cent the party secured in July. Reform UK, buoyed by new support, has surged to 25 per cent — just one point behind Labour — while the Tories languish in third place at 22 per cent. The Liberal Democrats and Greens poll at 14 per cent and 8 per cent respectively.
Anthony Wells, head of European Political and Social Research at YouGov, described the “speed and scale of Labour’s collapse since July” as striking, with voters defecting to the Lib Dems, Greens, Reform and the undecided camp. He warned that the election may not have been the nadir for either Labour or the Tories, as the poll suggests a tightening three-way race in the months ahead.
Mounting debt interest levels have eroded the chancellor’s £10 billion fiscal buffer aimed at balancing the books. If the cost of borrowing remains high, Reeves may be forced to announce further spending cuts in March—an approach Prime Minister Starmer characterises as “ruthless,” akin to the coalition government’s austerity programme from 2010. Criticism from the party’s left flank has intensified, with figures such as Diane Abbott warning of an “austerity mark two.”
Reeves is also coming under pressure from employers who fear Labour’s forthcoming workers’ rights package could stifle hiring and trigger early redundancies. The Confederation of British Industry (CBI) urged the government to delay the proposed reforms, which would extend unfair dismissal rights from day one and raise sick pay. Rupert Soames, CBI president, called it an “ugly rush,” warning that businesses might act pre-emptively to shed staff before any new legislation takes effect.
Despite these challenges, Starmer insists the government will press on with its economic agenda to deliver stability. Whether that resolute stance can shore up Labour’s slide in the polls remains uncertain, as Reform continues its strong showing and business leaders demand clarity on both fiscal and regulatory policy.
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PM pledges loyalty to Reeves as Labour vote share plummets and Reform gains ground