Rishi Sunak appeared to mix up the name of the Greater Manchester town he was conducting his broadcast interviews in, referring to Bury market as the "world famous Burnley market".
It came after BBC Breakfast presenter Ben Thompson told Rishi Sunak he originated from Burnley, in Lancashire.
Sunak, answering a question about the Government's so-called levelling-up agenda, said: "It is not just about being in the North by the way, we're here in Burnley but if you are growing up in a village in the South West or even on the South Coast, people want to feel opportunity is there for them, wherever they happen to be.
"I put it down to two things.
"One is having pride in the place you call home and a lot of what we announced yesterday, the levelling-up fund - bids like Burnley market, world famous Burnley market, benefiting from £20 million of investment.
"That's going to create jobs. It is about improving the every day infrastructure of our communities."
Burnley is 20 miles north of Bury.
Sunak was forced to defended his decision to cut air passenger duty (APD) for domestic flights in his Budget.
It comes as world leaders are set to descend on Glasgow for the COP26 climate change conference.
Challenged about it possibly leading to people taking more carbon-heavy flights across the UK rather than trains, the Chancellor told BBC Breakfast: "What we're doing here is returning to a system we used to have before we had to get rid of it, which was not paying air passenger duty on both of the legs of a journey that you took within the United Kingdom.
"Of course, it is right that we are consistent with our environmental goals so let me just talk a little about that.
"Aviation in general only accounts for about 8% of our overall emissions, and of that 8% a fraction - just 4% or 5% - comes from domestic aviation, so it is a tiny part of our emissions.
"So, yes, we're doing this to support domestic aviation, and regional airports will benefit from this, but we are also introducing a brand new band for ultra long-haul travel.
"Those who fly the furthest will pay the highest rates of APD, that's consistent with our environmental objectives, that's a new band that will come into force, and, actually, yesterday the independent watchdog said that our plans in the round will reduce carbon emission and move us further along the path to net zero."
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