Jan 14 (Reuters) - Would it be good or bad for sterling if UK Prime Minister Keir Starmer ditches his finance minister Rachel Reeves this year? Events will dictate the answer.

The pound might take a knee-jerk hit if Reeves gets the boot - the probability of which will increase if Britain's economy continues to flatline and Starmer feels the heat.

If Starmer opts for change at the top of the Treasury, any GBP losses spurred by the decision may be recouped if his incumbent hits the ground running with business-friendly ideas to try and get Britain's economy growing again.

Starmer was forced to defend Reeves on Monday, and said his government will be "ruthless" about repairing damage to Britain's finances caused by rising gilt yields - which have hurt sterling.

Around one in six British companies cut hiring late last year, according to a survey published on Tuesday that showed firms felt pressure to raise prices following tax increases announced by Reeves in her Oct. 30 budget.

Related comment:

For more click on

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GBPUSD

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

(Robert Howard is a Reuters market analyst. The views expressed are his own)

((robert.howard@thomsonreuters.com))