Politics / 1 MIN READ
Over 90 Labour MPs have called for the prime minister to resign, and Eurasia Group now gives an 80% probability he is ousted in 2026.
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Starmer out by December 31, 2026?
Prediction-market traders now price an 87.5% probability that U.K. Prime Minister Keir Starmer will leave office before Dec. 31, 2026, up 14 percentage points in 24 hours on Polymarket. The surge follows a wave of Labour MPs calling for his resignation after the party suffered heavy losses in local elections last week.
More than 90 of Labour's 403 MPs have publicly urged Starmer to step down or set a timetable for his departure, according to BBC News. Four junior ministers have resigned, and Home Secretary Shabana Mahmood privately told the prime minister to consider leaving. The rebellion was triggered after Labour lost control of over 30 councils and roughly 1,500 councillors, with voters flocking to Reform UK on the right and the Green Party on the left.
Political risk consultancy Eurasia Group raised the probability of Starmer being ousted this year to 80%, up from 65%. In a note cited by CNBC, analysts led by Mujtaba Rahman assigned a 35% probability that MPs force a leadership election by September, a 25% chance of an orderly transition if Starmer agrees to step down, and a 20% probability of an immediate contest.
Starmer held a crunch cabinet meeting Tuesday morning and issued a statement insisting he does not intend to quit, saying the country expects the government to get on with governing. However, POLITICO reported that the cabinet was split, with six of 22 ministers expected to tell him to go. Health Secretary Wes Streeting, a potential challenger, is due to meet Starmer on Wednesday to discuss how the party can recover.
The leadership crisis has spooked bond markets. Deutsche Bank strategists noted that the yield on 10-year U.K. government bonds rose to 5% on Monday, and the 30-year yield hit 5.67%, reflecting concern that a new Labour leader could ease fiscal rules and increase gilt issuance. The next major flashpoint is Wednesday's King's Speech, which will outline the government's legislative agenda but is being overshadowed by questions about who will lead it by year-end.
Politics / 1 MIN READ
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