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 is virtually neck and neck with Labor and the Conservatives to third place pushes.
Reeves, who cut short a trip to China amid mounting internal criticism, was accused of failing to contain a rise in government borrowing costs and a sharp fall in the pound. Labor MPs privately fear that her October budget – with steep tax rises and higher government spending – will hamper economic growth and could jeopardize the government’s budget targets.
Starmer initially offered only guarded assurances of his “complete confidence” in Reeves. However, amid speculation about her future, Downing Street confirmed she would remain chancellor until 2029. “He will work with her in the role of chancellor for the whole of parliament,” a Number 10 spokesperson said.
The pledge of loyalty came as a YouGov poll showed Labour’s vote share falling to 26 percent, a significant drop from the 34 percent the party achieved in July. Reform Britain, buoyed by new support, has risen to 25 percent – just one point behind Labor – while the Tories languish in third place on 22 percent. The Liberal Democrats and the Greens score 14 percent and 8 percent 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, Reforms and the undecided camp. He warned that the election may not have been the low point for either Labor or the Tories, with the poll suggesting a tightening three-way race in the coming months.
Rising interest on debt has eroded the chancellor’s £10 billion budget buffer intended to balance the books. If borrowing costs remain high, Reeves may be forced to announce further cuts in March – an approach Prime Minister Starmer characterizes as “ruthless”, similar to the coalition government’s 2010 austerity programme. The criticism from the left flank of the party has increased. with figures such as Diane Abbott warning of an ‘austerity sign two’.
Reeves is also coming under pressure from employers who fear Labour’s upcoming employment rights package could stifle recruitment and lead to early layoffs. The Conference of British Industry (CBI) urged the government to delay proposed reforms, which would extend unfair dismissal law from day one and increase healthcare costs. Rupert Soames, chief executive of the CBI, called it an “ugly stampede” and warned that companies could take pre-emptive action to lay off staff before new legislation comes into force.
Despite these challenges, Starmer insists the government will continue with its economic agenda to deliver stability. Whether that determined stance can sustain Labour’s decline in the polls remains uncertain as reforms continue its strong record and business leaders demand clarity on both fiscal and regulatory policies.