British Prime Minister Keir Starmer is facing intense pressure to resign as an internal rebellion within the Labour Party intensified on Tuesday. So far, 77 MPs have publicly called for him to step down following the party’s poor performance in local elections last week, which saw voters turn to the Reform UK and Greens parties.
The crisis has deepened when two junior ministers, Miatta Fahnbulleh and Jess Phillips, resigned on Tuesday in protest at Starmer’s leadership. Although Starmer insisted in a cabinet meeting that he would stay in power, analysts now predict his chances of remaining as Prime Minister are now around 20 percent.
Financial markets are showing clear signs of concern over political instability in Westminster. The cost of UK government borrowing (Gilt) has surged to an 18-year high, with the 10-year bond yield hitting 5 percent. Investors fear any change in leadership would lead to a loosening of fiscal discipline and a rise in national debt.
Technically, a formal leadership challenge can only be triggered if 81 Labour MPs (20 percent) nominate a new challenger. So far, the process has not officially begun, but divisions within Starmer’s cabinet are reportedly growing, with several senior ministers urging him to set a timetable for his resignation.
Names such as Andy Burnham, Angela Rayner, and Wes Streeting have now emerged as potential successors. Economic analysts have warned that the transition comes at a time when the UK is struggling with high inflation and the economic fallout from the Iran war, making it a particularly risky time for global investors.
