UK's Starmer refuses to resign, throws gauntlet to challengers

(Sharecast News) - Embattled UK Prime Minister Keir Starmer on Tuesday refused to resign despite growing calls from within his own ruling Labour Party to step aside - effectively laying down a challenge to potential rivals to unseat him. After a hammering at local elections last week to compound months of policy failures and plunging popularity, at least 70 lawmakers and ministers overnight called on Starmer to go.

However, at a Cabinet meeting in Downing Street on Tuesday, Starmer remained defiant, saying he took responsibility for the election results and "I take responsibility for delivering the change we promised".

The news saw a rise in gilt yields and a falling pound on the growing political uncertainty as traders feared a new administration could relax the government's self-imposed fiscal rules and lift public spending. The 30-year bond yield was up 13 basis points at 5.803%.

"The past 48 hours have been destabilising for government and that has a real economic cost for our country and for families," Starmer said in a statement released by Downing Street.

"The Labour Party has a process for challenging a leader and that has not been triggered. The country expects us to get on with governing. That is what I am doing and what we must do as a Cabinet."

Any challenger would have to garner the support of 81 MPs to launch a leadership bid, with the Health Secretary Wes Streeting seen as a main contender, although he has said in the past that he would not make a move.

XTB research director Kathleen Brooks said UK bond yields were facing a "double whammy" of an energy price spike and a political crisis.

"The risk is that we get a bond market meltdown in the UK in the coming days. If that happens, will it quiet the factions of the Labour party who have threatened to ignore the bond market, ditch fiscal rules and boost public spending even more?"

Reporting by Frank Prenesti for Sharecast.com