Keir Starmer told Cabinet today that he is tackling the cost of living crisis despite more evidence that ordinary families are struggling.

Gathering his senior team for the first time in 2026, the PM talked up his action to ease the pressure – admitting that will be what the government is judged on come the election.

But the meeting comes after figures showed consumers racking up more credit card debts in the run-up to Christmas, with food prices rising.

Amid more leadership jostling, a YouGov poll has found Labour dropping behind the Tories into third place. The 17 per cent support matches the lowest yet recorded for the government, with Reform well ahead on 26 per cent.

Addressing Cabinet this morning, Sir Keir said: ‘I know many families across Britain are still worried about the cost of living. When I talk to people, they tell me it is the biggest issue they are facing. We are on their side.

Keir Starmer told Cabinet today that he is tackling the cost of living crisis despite more evidence that ordinary families are struggling

Sir Keir told ministers they will be judged at the next general on whether ‘people feel better off’.

‘That will require hard work, focus and determination from all of us,’ he said. ‘Together, as a team, we will rise to that challenge and deliver for the whole country.’

The Labour government is taking action to tackle the cost of living including taking £150 off average energy bills, but Sir Keir told ministers they need to go further.

He said: ‘Our challenge for this year is to prove that politics can deliver. Nowhere is this more important than it comes to putting more money in people’s pockets.

‘I know so many families across the country are still worried about the cost of living. For most people it’s the single most important and biggest issue they are facing. And we are on their side.

‘Yes there’s a world of uncertainty and upheaval, but tackling the cost of living remains and must remain our focus.’

The PM highlighted policies that will kick in this year such as the first rail fare freeze in 30 years and an increase to the National Living Wage worth £900 a year for millions of the lowest paid.

He also spoke of how mortgage rates are now at their lowest since the mini-Budget in 2022.

‘By restoring economic stability, interest rates have fallen six times, helping homeowners with their mortgages,’ he said.

Mr Starmer added: ‘At the next general election we will be judged on whether we’ve delivered on things that really matter – do people feel better off, are public services improving, and do people feel safe and secure in their own community.

‘That will require hard work, focus and determination from all of us. Together, as a team, we will rise to that challenge and deliver for the whole country.’

Focusing on the cost of living is clearly the new tactic as Downing Street desperately tries to revive the PM’s fortunes.

However, the first day of the New Year ‘relaunch’ was completely overshadowed yesterday by fallout from the US operation in Venezuela and questions about Greenland being invaded.

Sir Keir’s ministers are likely to have considered the international situation this morning.

They also held a political Cabinet session, attended by new deputy leader Lucy Powell.

Health Secretary Wes Streeting again had to bat away questions about his leadership ambitions as he toured broadcast studios this morning.

Sir Keir’s efforts to kick off 2026 on the front foot after a disastrous 2025 have already run into trouble.

He has been accused of Brexit ‘betrayal’ and flouting his own manifesto after suggesting the UK will deepen ties to the EU single market.

A Bank of England report released yesterday showed that the annual growth rate for consumer credit edged up to 8.1 per cent in November, from 7.5 per cent the previous month.

A Bank of England report released yesterday showed that the annual growth rate for consumer credit edged up to 8.1 per cent in November, from 7.5 per cent the previous month

That included a 12.1 per cent increase in credit card borrowing – the highest figure since January 2024 when it was 12.5 per cent.

Danish prime minister Mette Frederiksen warned yesterday that a US raid on Greenland would threaten ‘Nato and thus the security that has been provided since the end of the Second World War’.

Sir Keir has said the UK ‘stands with’ Denmark on Greenland, while Mr Streeting told Sky News on Tuesday that the ongoing threat from Russia meant it was ‘not the time to destabilise Nato and undermine our collective security’.