Liz Truss has promised there will be no cuts to public spending despite a warning that £60 billion is needed to get finances back under control.
Labour leader Keir Starmer probed the Prime Minister in the House of Commons on her mini-budget which sent the markets into turmoil due to unfunded tax cuts.
Starmer asked the PM : "During her leadership contest, the prime minister said, 'I'm very clear. I'm not planning public spending reductions'. Is she going to stick to that?"
Truss replied: "Absolutely. We are spending almost a trillion pounds of public spending. We were spending £700 billion back in 2010. What we will make sure is that over the medium term, the debt is falling. But we will do that, not by cutting public spending, but by making sure we spend public money well."
It comes after the Institute for Fiscal Studies (IFS) said Truss may have to find £60bn worth of cuts to get public finances back under control.
The IFS claimed it was not possible to deliver cuts on that scale through efficiency savings and "trimming the fat" - and that it would require major cuts to public services.
Starmer also said the Prime Minister needs to "stop ducking responsibility" and reverse the "kamikaze budget".
Asking his third question at Prime Minister's Questions, Starmer said: "The economy's in turmoil, people are really worried. This is really not the time to descend into absolutely nonsense attacks about last night."
He added: "There's no point trying to hide it. Everyone can see what has happened. The Tories went on a borrowing spree, sending mortgage rates through the roof. They are skyrocketing by £500 a month.
"For nearly two million homeowners their fixed-rate deals are coming to an end next year. They're worried sick, and everybody in this House knows it. They won't forgive.
"They won't forget, and nor should they. When will she stop ducking responsibility, do the right thing and reverse her kamikaze budget which is causing so much pain?"
Responding in the Commons, Truss said: "I'm genuinely unclear," Truss said, prompted jeers from the Labour benches, "as to what the Labour Party's policy is on our energy price guarantee".
"It was the biggest part of our mini-budget. Are the opposition saying they want to reverse it and they want to see people facing energy bills of £6,000?"
Starmer earlier asked if she agreed with Jacob Rees-Mogg who argued the market turmoil was nothing to do with the mini-budget.
He said: "This morning the Business Secretary toured the TV studios, arguing that the turmoil in the markets has nothing to do with her budget. Does the Prime Minister agree with him?"
Truss replied: "What we have done is we have taken decisive action ... We have taken decisive action to make sure that people are not facing energy bills of £6,000 for two years. And I think we remember the Opposition is only talking about six months.
"We've also taken decisive action to make sure that we are not facing the highest taxes for 70 years in the face of a global economic slowdown.
"What we are making sure is that we protect our economy at this very difficult time internationally. As a result of our action - and this has been independently corroborated - we will see higher growth and lower inflation."
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