Menu

British Prime Minister Keir Starmer announced Monday that he will resign as prime minister and leader of the Labour Party, less than two years after sweeping to power in a landslide election. Starmer said he will remain in office until a new Labour leader is chosen, a process expected to conclude by September.

The resignation marks another dramatic turn in Britain’s turbulent politics, paving the way for the country’s seventh prime minister in a decade. Starmer’s departure comes amid mounting pressure from within his party, which intensified last week when former Manchester mayor Andy Burnham decisively won election to return as a lawmaker. Burnham has confirmed he will run for Labour leader, while his main rival, former health minister Wes Streeting, ruled himself out and endorsed Burnham’s candidacy.

Nominations for the leadership contest open July 9. If only one candidate comes forward, Labour could have a new leader by mid July; otherwise, the process will run until September.

Starmer’s fall is striking given the scale of his victory in 2024, which promised to end years of political instability following Britain’s vote to leave the European Union. Instead, his premiership quickly became mired in internal dissent and declining popularity.

Burnham now appears the frontrunner to succeed him, with party insiders suggesting his return to Parliament was timed to challenge Starmer’s leadership. His candidacy has already reshaped the race, leaving Labour poised for another shift in direction just two years after its historic win.

Nigel Green, CEO of deVere Group, said markets have remained notably composed despite the dramatic political development, with sterling holding broadly firm and avoiding the type of sharp sell-off that often accompanies unexpected leadership upheaval.

"Part of the market response reflects relief. Relief that Starmer has gone. Relief that Labour appears to have avoided months of infighting and uncertainty over who takes charge,” said Green. “Markets dislike drift and uncertainty. They dislike governments that appear unable to set a clear economic direction. Starmer’s departure removes some of those concerns.”