UK Markets Rocked as Starmer Clings to Power Ahead of King’s Speech
Prime Minister Keir Starmer faced a fresh threat to his leadership on Wednesday as Health Secretary Wes Streeting held a 16-minute meeting with him in Downing Street, with allies of the Health Secretary signalling he is preparing to resign and mount a formal leadership challenge.
Markets React to Political Instability
UK gilt markets bore the brunt of the political turmoil, with long-term borrowing costs reaching a 28-year high on Tuesday as the crisis deepened. Heavy selling pressure on gilts and bonds continued into Wednesday, a stark reminder of the economic cost of prolonged political uncertainty at the heart of government.
The market reaction underscores the vulnerability of public finances at a moment when institutional stability is paramount. Investors appear unwilling to price in a steady policy outlook while the leadership of the governing party remains unresolved.
Streeting Poised to Resign
Allies of Mr Streeting told The Times that he is “going to go for it,” suggesting he will formally resign on Thursday and declare a leadership bid. After his meeting with the Prime Minister, a stony-faced Streeting left Number 10 without commenting to waiting reporters.
His team declined to deny claims that he was poised to quit. Notably, Mr Streeting did not use social media to reaffirm his support for Sir Keir on Tuesday, nor did he publicly back the Prime Minister after the weekly Cabinet meeting.
Downing Street sought to play down the encounter, with a spokesman insisting the two men were merely “having a coffee” and dismissing suggestions of a confrontation over Sir Keir’s leadership.
King’s Speech Proceeds Amid Crisis
King Charles III delivered the State Opening of Parliament on Wednesday, setting out the agenda of a government under considerable strain. The King’s Speech contained 34 Bills and three draft Bills, with Downing Street insisting it reflected the scale of Sir Keir’s ambition and the government’s “commitment to change.”
The ceremonial occasion did little to stabilise the political situation. The SNP announced it would table an amendment to the King’s Speech to force a parliamentary vote on Sir Keir’s future. New SNP Westminster leader Dave Doogan stated: “If the Labour Cabinet ministers don’t have the decency to do the right thing — then Parliament must.”
Labour Divided Over Starmer’s Future
The governing party is now openly fractured. As of Wednesday morning, 93 Labour MPs had called on Starmer to resign, while 158 had publicly backed him to remain as leader. More than 100 MPs signed a statement warning that “this is no time for a leadership contest.”
The crisis was triggered by Labour’s poor performance in last week’s local elections. Four ministers have already resigned, including Jess Phillips and health minister Zubir Ahmed, an ally of Mr Streeting. At least 80 MPs had demanded Sir Keir stand down before the King’s Speech.
Labour-affiliated unions dealt a further blow, stating publicly that “it is clear” the Prime Minister will not lead the party into the next general election, and calling for a process to elect a new leader.
A Crowded Field of Potential Successors
Mr Streeting is among several figures said to harbour leadership ambitions, but the absence of consensus around a single successor remains one of Sir Keir’s few remaining political advantages. Support is fragmented between Streeting, former Deputy Prime Minister Angela Rayner, and Greater Manchester Mayor Andy Burnham.
Burnham, a prominent figure on the soft left of the party, would first require a sitting MP to stand aside to facilitate a by-election return to Parliament. Sources close to Energy Secretary Ed Miliband have denied reports that he is preparing to enter the race should Streeting trigger a contest.
Sir Keir, for his part, has moved quickly to fill the ministerial vacancies left by resignations and has insisted that the formal process for challenging a party leader has not been triggered. Whether that constitutional argument holds through Thursday remains to be seen.