UK markets were under pressure on Friday as the leadership battle within the ruling Labour Party starts to open up.
To recap, this week’s turmoil follows a very weak, but not totally unsurprising, set of local election results for Labour earlier this month. With Nigel Farage’s Reform Party dominating the polls, and the Green Party increasingly dividing Labour’s share of the vote, there’s growing pressure on the party to change direction as it looks ahead to the next General Election in three years’ time.
So far, formally at least, no leadership contest has been triggered. Keir Starmer remains both Labour leader and prime minister. But it is only a matter of time.
Wes Streeting, until this week the Health Secretary, has resigned and is expected to stand, though it remains unclear whether he has support from the 81 Labour MPs required to trigger a contest. Comments from Streeting today suggest he has acknowledged a leadership battle will need to wait for the summer.
That’s because Andy Burnham, Mayor of Manchester and favourite to become Labour leader, needs to be an MP in Westminster to be eligible to compete in a leadership contest. He has announced he’ll be standing in Makerfield, a newly-vacated seat in the north of England, in a by-election that’s likely to take place in the second half of June.
That in itself is no easy feat. Polls suggest that, in the absence of Burnham, Reform would win comfortably in Makerfield. Farage’s party dominated the local elections in the area. Burnham will be banking on his local popularity to get him elected.
Assuming he does, that opens up a leadership contest that’s likely to take place through the summer, with the results sewn up before the Labour Party conference in late September.