Liz Truss’s lawyers have sent a cease and desist letter to Sir Keir Starmer demanding that he stops saying she “crashed the economy”.

The letter states that the claims by the Prime Minister are defamatory and “false and misleading”.

It also suggests that Sir Keir’s accusations contributed to the Tory losing her South West Norfolk seat in the July general election.

The letter – sent by lawyers at Asserson – refers to comments made by the PM in June 2024 in which he talks about Ms Truss “crashing” or having “crashed” the economy.

It says: “Of particular concern are the false and defamatory public statements you made about our client in the lead-up to the UK general election from late May 2024.

“At a time when you knew or ought to have known that those statements were false; and the statements were likely to materially impact public opinion of our client whilst she was standing as the parliamentary candidate for the Conservative Party in South West Norfolk.”

The letter, first reported by the Telegraph, argues that the market movement during Ms Truss’s tenure in September and October 2022 should not be classified as a crash of the economy.

Ms Truss entered No 10 in September 2022 but resigned less than seven weeks earlier following the reaction to her tax-slashing mini-budget.

Referring to the movements in gilts and exchange rates at that time, the letter says: “Such rate movements cannot properly be described as a crash of the economy.

“To use such an expression is to display ignorance of basic economics and common usage of the term ‘crash’ when referred to an economy.”

It asks for the Prime Minister to “immediately cease and desist” from repeating the claims.

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But Downing Street indicated that Sir Keir will not soften his language about Ms Truss.

Asked whether the Prime Minister stands by his assertion, his official spokesman said: “There’s only so much I can talk about previous administrations, but you’ve got the Prime Minister’s language which he absolutely stands by in relation to the previous government’s record, and you don’t have to take it from the Prime Minister.

“I think you can ask people up and down the country what the impact of previous economic management was on their mortgages, on inflation, and I think you’ll get similar answers.

“But what we’re focused on now is the decisions this Government needs to take to ensure that we tackle the long-standing underlying weaknesses in the UK economy that you know have obviously been around for many years – low productivity, low growth – because ultimately they are the fundamental reasons why wages have been low over recent years and … the Government’s number one mission (is) to deliver growth and deliver higher living standards for working people.”

Asked whether Sir Keir had plans to moderate his language, he said: “No.”