Prime Minister Sir Keir Starmer has publicly reiterated his commitment to keeping Chancellor Rachel Reeves in office until the end of the current Parliament, despite new opinion polls showing Nigel Farage’s Reform UK Party closing in on Labor and pushing the Conservatives into third place.
Reeves, who cut short a trip to China to face growing domestic criticism, was accused of failing to contain rising government borrowing costs and a sharp decline in the pound. Labor MPs privately fear that its October budget – which includes sharp tax rises and increased public spending – will hamper economic growth and could jeopardize the government’s fiscal targets.
Starmer initially made only cautious assurances of his “full confidence” in Reeves. However, amid speculation about her future, Downing Street confirmed she will remain chancellor until 2029. A No 10 spokesman said: “He will work with her in the role of chancellor for this entire Parliament.”
The pledge of loyalty came as a YouGov poll showed Labour’s share of the vote falling to 26 per cent, a significant drop from the 34 per cent the party received in July. Reform UK, buoyed by new support, has risen to 25 per cent – just one point behind Labour – while the Conservatives languish in third place on 22 per cent. The Liberal Democrats and Greens received 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 rock bottom for either Labor or the Conservatives, with polling pointing to a close three-way race in the coming months.
Rising interest levels on debt have eroded the Chancellor’s £10bn financial buffer which is intended to balance the books. If the cost of borrowing remains high, Reeves may be forced to announce further spending cuts in March – an approach that Prime Minister Starmer describes as “ruthless”, and akin to the austerity program the coalition government has been running since 2010. Criticism has intensified from The left wing of the party. With figures such as Diane Abbott warning of a “second sign of austerity”.
Reeves is also under pressure from employers who fear Labour’s upcoming workers’ rights package could stifle recruitment and lead to early layoffs. The Confederation of British Industry (CBI) has urged the government to delay the proposed reforms, which would extend unfair dismissal rights from day one and increase sick pay. Robert Soames, head of the Confederation of British Industry, described it as an “ugly rush”, warning that companies may act pre-emptively to lay off staff before any new legislation comes into force.
Despite these challenges, Starmer insists that the government will continue to implement its economic stabilization agenda. It remains uncertain whether this assertive stance can support Labour’s decline in the polls, with Reform continuing its strong showing and business leaders demanding clarity on both fiscal and regulatory policy.