Chancellor Rachel Reeves and former PM Liz Truss. (Image: GETTY)

       Sir Keir Starmer’s claim that Liz Truss “crashed the UK economy” during her brief tenure in No.10 has come back to haunt him after Brexiteer Toby Young used his remarks to skewer Chancellor Rachel Reeves.

       During the 2024 general election campaign, Sir Keir Starmer consistently cited the economic fallout from the mini-budget introduced by Kwasi Kwarteng, Ms Truss’s Chancellor, as a reason to eject the Tories from office.

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       However, posting on X, Mr Young, director of the Free Speech Union think tank, pointed to what he saw as a key flaw in the argument.

       He explained: Sir Keir Starmer's basis for claiming Liz Truss "crashed the economy" was the yields on 10-year UK gilts rose above 4% after the mini-budget.

       “Today, they're trading at 4.25%.

       READ MORE: Keir Starmer accused of 'double lie' as Rachel Reeves 'to unleash tax rises'

       Then-Chancellor of the Exchequer Kwasi Kwarteng and Ms Truss in 2022, when she was PM. (Image: Getty Images)

       "Does that mean Rachel Reeves has 'crashed the economy’?"

       Government bonds typically measure economic stability, and rising yields reflect a sell-off by investors who demand higher returns to hold on to what they perceive as riskier debt.

       At the time, Sir Keir pointed to the increase as evidence of a 'confidence crisis' instigated by the Truss administration's policies, which he argued made government borrowing costlier and raised inflation risk.

       After the surge in bond yields, the Bank of England intervened to stabilise the bond market by purchasing long-dated gilts.

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       Sir Keir Starmer's basis for claiming Liz Truss "crashed the economy" was the yields on 10-year UK gilts rose above 4% after the mini-budget. Today, they're trading at 4.25%. Does that mean Rachel Reeves has "crashed the economy"?

       — Toby Young (@toadmeister) October 25, 2024

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       This extraordinary step, according to Sir Keir, underscored the severity of the situation and the government’s failure to maintain economic stability.

       He further argued that this intervention was effectively a taxpayer-funded bailout of sorts, highlighting the harm done to pension funds and other key financial entities holding gilts.

       The spike in gilt yields led to higher interest rates across the board, affecting not only government borrowing costs but also mortgage rates for homeowners.

       Many mortgage providers temporarily pulled fixed-rate mortgage offers, and new mortgage rates increased, putting significant financial pressure on households.

       Prime Minister Sir Keir Starmer. (Image: Getty)

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       Sir Keir and other senior Labour figures seized on this to claim Ms Truss’s policies had directly worsened the cost-of-living crisis for ordinary Britons.

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       Rachel Reeves accused of risking mortgage misery with ￡50 billion borrowing blitz

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       177 Comments

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       93 Comments

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       34 Comments

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       4 Comments

       As a Labour MP I fear we will lose the next election if Reeves doesn't follow this advice

       932 Comments

       Rachel Reeves doesn't have it in her to deliver vital culture change Britain needs

       27 Comments

       Keir Starmer accused of masterminding 'naked class war' on hard-working Britons

       1046 Comments

       Don't let Labour pull the wool over your eyes! They are about to drop a bomb on your banks

       87 Comments

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       67 Comments

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       11 Comments

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       174 Comments

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       649 Comments

       Rachel Reeves must avoid tax rises in this Budget

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       60 Comments

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       177 Comments

       Rachel Reeves warned 'don't be stupid' after UK borrows ￡120bn but pays ￡102bn in interest

       93 Comments

       Keir Starmer accused of 'double lie' as Rachel Reeves 'to unleash slew of tax rises'

       34 Comments

       Ms Truss, who lost her South-West Norfolk seat at the last general election, has vigorously defended her brief tenure and rejected claims that she was responsible for the turmoil following Mr Kwarteng’s fiscal event.

       She has argued that her economic policies were misunderstood or unfairly blamed for issues she sees resulting from broader economic challenges.

       She further claimed much of the economic turbulence during her time in office stemmed from global factors.