Rachel Reeves had an angry exchange with her US counterpart, Scott Bessent, in Washington last month over the war in Iran, sources have said, in the latest sign of the deepening tensions between the two countries.

The chancellor and the US treasury secretary argued in person during the spring meetings of the International Monetary Fund, according to people briefed on the exchange, confirming a story first reported by the Financial Times.

The row centred on Reeves’s criticisms over the Iran conflict, which she made in public before the meetings began, triggering an angry backlash from some in the Trump administration.

Criticisms by Reeves and the prime minister, Keir Starmer, have caused the biggest rift in US-UK relations for decades, with the US president, Donald Trump, threatening to rip up a trade deal and to recognise Argentina’s claims to the Falkland Islands in response.

Reeves told the Mirror on 14 April she felt “very frustrated and angry that the US went into this war without a clear exit plan”, calling the war a “folly”.

She then travelled to the US, where she told CNBC the goals of the war had “never been clear”.

“I’m not convinced this conflict has made the world a safer place,” Reeves told a panel organised by the US broadcaster. “It’s not been clear over the last six weeks what exactly the aim of this conflict is.”

According to those briefed on her meetings, Bessent upbraided her over the comments during an in-person meeting on 15 April, including invoking the threat of an Iranian nuclear attack on Britain.

He is understood to have made comments along the lines of those he made to the BBC a day earlier, when he responded to concerns about the war’s economic fallout by saying: “I wonder what the hit to global GDP would be if a nuclear weapon hit London.”

Reeves responded by telling the treasury secretary she was not his employee and did not like his tone.

One UK official said: “Reeves was as direct in private with Bessent about her views on the Iran [war] as she was in public.”

Downing Street said on Tuesday: “The chancellor and the US treasury secretary have a good relationship. They have had constructive conversations together since the chancellor’s visits to Washington.”

British government sources also pointed to a US treasury readout of the meeting in the immediate aftermath.

The department said at the time: “During their discussion, Secretary Bessent underscored the US treasury’s commitment to Economic Fury, leveraging all tools and authorities against those who continue to support Iran’s terrorist activities.”

The war in Iran has created arguably the biggest divide between the US and UK since the Suez crisis of 1956.

Having gone to great lengths to keep Trump on side in the early months of his premiership, Starmer has taken an increasingly outspoken position against the president’s foreign policy.

At a meeting of the European Political Community in Armenia this weekend, the prime minister said: “We cannot deny that some of the alliances that we have come to rely on are not in the place we would want them to be.”

With transatlantic tensions high, the president has in recent weeks threatened to unpick a trade deal that has already been agreed, impose fresh tariffs in response to the UK’s digital services tax and recognise Argentinian control of the Falklands.

However, he struck a more conciliatory note last month during the visit of King Charles and the queen to the US, including announcing an end to tariffs on scotch whisky.

“The king and queen got me to do something nobody else was able to do, without hardly even asking!” the president posted on his Truth Social platform.