This morning, the British Prime Minister Keir Starmer announced his resignation as leader of the governing Labour Party and a timetable for a new Prime Minister to be announced over the summer. The resignation follows weeks of political upheaval in the UK following major ministerial resignations and a stark set of local election results for the Labour Party.
Keir today, gone by September
In his resignation statement, the Prime Minister announced that nominations for his successor as leader of the Labour Party (and Prime Minister) would open on 9th July. It is expected that nominations will close a week later. The former Mayor of Manchester, Andy Burnham, is seen as the favourite to replace Keir Starmer after dramatically returning to Parliament in a by election (a special election to replace another MP) last week.
It is currently unclear if Burnham’s nomination for leader of the Labour Party will be contested. If Burnham is the only nominee, it is possible for him to become Prime Minister by 20th July. However, in the event of a contest, Labour Party members will vote over the summer months, with a winner and new Prime Minister announced by 1st September.
Background to today’s resignation
Keir Starmer’s resignation comes after the Labour Party suffered its worst set of local election results in history, losing 1,400+ council seats in May. Following the results, over 100 Labour MPs called on Keir Starmer to resign, and several government cabinet members have since resigned including Health Secretary Wes Streeting and Defence Secretary John Healey.
Despite winning one of the largest Parliamentary majorities in British history less than two years ago, the government has slumped in opinion polls for the best part of 18 months, with the populist right Reform Party led by Nigel Farage currently in a comfortable first place. Many Labour MPs see Andy Burnham as a potential figurehead to lead a revival in the party’s fortunes, however he has been reserved in revealing any national policy platform so far.
What this means for the British market
The focus of national media will now be turned to the ongoing political situation, with journalists across different beats pulled in to cover news stories around the ensuing leadership election. This means the following six weeks will not be an optimal time for major corporate announcements or media campaigns.
If Andy Burnham does become the next Prime Minister, there is some expectation that he will pursue a more left wing policy platform than Starmer. Whilst he has not announced a policy platform, he has signalled support for nationalisation of utilities and potentially increasing UK borrowing to fund public sector reindustrialisation projects.
Starmer’s resignation, and the expectation that Burnham will replace him, has led to warnings of volatility in British bond markets, with some traders warning of a summer of economic uncertainty as a result of the leadership contest. However, the prospect of an uncontested election led this morning to steadying of borrowing costs and the value of the pound.
About the author
Jack Emsley is an Associate Director at Tyto, focused on the UK market. He has a wealth of experience delivering media relations and policy-focused communications campaigns for technology companies, drawing on his background in elected politics and political communications.