Kemi Badenoch has said she is "really worried" that the UK might be forced to embark on a 1976-style bailout from the International Monetary Fund.
The Conservative leader told BBC Newsnight that the UK could be forced to go "cap in hand" to the IMF unless the government delivers a plan for economic growth.
She made her remarks as she offered to work with Sir Keir Starmer "in the national interest" to cut welfare spending. She said welfare cuts and growth were needed to help the government out of a "doom loop" of rising taxes and precarious public finances.
A Labour Party source said Mrs Badenoch had a "brass neck" for offering such advice, after the Conservative government had "crashed the economy".
The Labour government of the late prime minister Jim Callaghan was forced to apply for a $3.9bn (£2.9bn) emergency loan from the IMF during the 1976 sterling crisis.
