The Prime Minister of the United Kingdom (UK), Keir Starmer, has officially announced his resignation as Prime Minister and Leader of the Labour Party. The decision, made outside Downing Street No. 10, ends months of domestic political turmoil after his government suffered a crushing defeat in local elections in May.
Starmer's resignation shocked the market as he had just led the Labour Party and recorded a landslide victory in the July 2024 general election to end the Conservative party's 14-year rule. He confirmed that he would continue to act as prime minister temporarily to ensure an orderly transition of power.
Internal issues in financial markets also put pressure on after Kallum Pickering of Peel Hunt revealed that the UK has the highest borrowing costs in the G7 bloc and recorded the worst average inflation rate in the past decade. Initial reactions saw the pound fall 0.19% against the US dollar to trade around $1.3207.
Starmer's leadership crisis has reportedly reached its peak amid internal party squabbles over welfare reform and a moral quandary over the appointment of Peter Mandelson as the UK's ambassador to the US. A recent Ipsos poll also found that 52% of Britons want Starmer to step down immediately.
Following the announcement, former Greater Manchester Mayor Andy Burnham, who had just won a by-election on 18 June, emerged as the single strongest candidate to take over as prime minister. Burnham has received strong support from the party's senior leadership and has pledged to handle the transition responsibly.
