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Roula Khalaf, Editor of the FT, selects her favorite stories in this weekly newsletter.

Sooner or later every prime minister remembers that their formal title is first lord of the Treasury. No matter how harmonious the relationship with their chancellor, there is always the chance that a leader will conclude that not everything can be left to Whitehall’s economic ministry. For Sir Keir Starmer, that moment was too much.

If there’s one trend worth watching for next year, it’s the first signs of friction between Starmer and his chancellor, Rachel Reeves. What’s more, this is how it should be. The prime minister and the chancellor have different jobs. The latter exists to manage public finances and the economy; the former must see the wider picture and intervene when necessary.

To be clear, I am not suggesting an imminent split between Starmer and Reeves, that she has lost confidence in him or doubts Labour’s growth strategy. The two are strongly aligned and Reeves remains one of his most trusted and important allies. The fault lies with Starmer. In part, his approach reflects his overall leadership style. He believes in delegation and, say colleagues, apparently does not want to be called upon to arbitrate between his ministers.

But “I have a woman who takes care of it for me” is not a practical approach. For all that they trust Reeves, those close to Starmer worry that he has ceded too much control to the Treasury. A number of senior Labor figures have now blamed the heavy political cost of the move which will mean trying to pay for winter fuel for pensioners. They feel this shows that Number 10 should be more proactive in assessing the feel of, not just agreeing with, the Treasury’s ideas. There are arguments for the move. It signals the markets and Labor MPs are ready to make tough decisions. But the backlash has eroded support and confidence.

Given the central position of economic growth in his policy platform, Starmer’s Downing Street was remarkably passive. The Treasury filled the void, as always. Part of the problem is that the prime minister has shown little natural appetite for economic policy. He has shaken up his political operation but apart from Labour’s long-serving and broad-minded director of policy, Rav Athwal, there is no significant economic adviser in Downing Street. His most important officials, the new cabinet secretary among them, are also light on Treasury experience. No government wants instability in the opposing camps of Numbers 10 and 11 but the prime minister should be able to challenge decisions. A good premier improves their chancellor.

Successful prime ministers need to give some grit to the engine. Even the closest partnerships – David Cameron and George Osborne are often cited – need a leader who can push back against Treasury orthodoxy and inject a bit of political nous into decisions. This will become even more necessary as the Treasury completes its two-year spending cycle. Ministers should get a hearing from Number 10.

The greater political engagement and economic brain power of Number 10 seems essential. Amid worrying data and unpopular tax hikes, Labor has lost control of its growth narrative, Starmer’s promised central mission. While there is much to applaud Labour’s planning and pension reforms, they have provided little short-term dividend. Reeves maintains that the first year must be difficult and people need to hold their nerve. An ally reasoned: “It’s only five months.”

But confidence was shattered not only by the decision on winter fuel but also by the large increase in the employer’s national insurance contribution, taxes on jobs and businesses. Meanwhile, the majority of new investment goes to public services rather than to sectors that could boost growth. All of this is understandable given the legacy, but it doesn’t make for a compelling story to sell to businesses and investors. Taxes are high. Brexit realignment feels more like mood music. While Starmer expressed frustration with financial and environmental regulators stifling growth, he raised the regulatory burden on owners.

There is no current prospect of a major rethink but key figures see the need for more near-term measures to boost business confidence and entice foreign investors to look closer. – also in the UK. Even friends are concerned. Sir John Kingman, the City grandee and ex-Treasury official, this week was appointed to Labour’s industrial strategy councilwrote last month that “We need a bigger bazooka”.

Labor does not feel able to cut taxes and its instincts are not deregulatory. A change of pace and emphasis is needed if the ministers are to lift the mood and attract foreign investors. Kingman’s proposals include more ambitious measures to development of the Oxford-Cambridge arcwith greater commitment to laboratory space, housing and infrastructure. This is a sign of a country investing in its strengths.

A “change of tone” is promised in the new year. Starmer, Reeves and others will do more to tell the country. But it takes more than words to transfer business sentiment.

This is not about discrediting or dismantling Reeves but a more active use of the prime minister’s role, persuading, challenging, demanding more. Starmer deserves to hold his nerve but sometimes a touch of impatience is needed. This issue more than anything else will determine the fate of his government as well as the country. Rarely does that mean a greater willingness to become the title he holds.

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