Keir Starmer leadership crisis sparks sudden drop in value of pound and borrowing costs surge

TRENDING Stories Videos Your Say Ftse 100 futures pointed to a 64-point decline at the market open as concerns over UK political instability added to wider fears surrounding stalled Middle East peace negotiations.Bond investors have become increasingly concerned that any Labour leadership contest could result in a shift towards higher public spending and borrowing under a more left-leaning successor.The latest market reaction followed a brief period of stability at the end of last week after Sir Keir insisted he would not walk away following Labour's poor local election results.Political tensions inside Government intensified further overnight ahead of a crucial cabinet meeting scheduled for 9.30am on Tuesday morning.Senior ministers are understood to have urged the Prime Minister to outline a timetable for his departure from Downing Street.Foreign Secretary Yvette Cooper and Home Secretary Shabana Mahmood have reportedly pressed Sir Keir to prepare an orderly transition of power.More than 70 Labour MPs have also publicly demanded clarity over his future.One minister close to the Prime Minister described the atmosphere within Government as absolutely barking mad.Another ally reportedly conceded the internal situation had become pretty ugly.Darren Jones, the chief secretary to the Treasury, appeared on the morning broadcast round but declined to rule out the possibility of Sir Keir resigning.Mr Jones told Times Radio: He's listening to colleagues and he's talking to colleagues. I can't get ahead of any decision he might take.A minister separately told the Financial Times that the Prime Minister was weighing whether his leadership position could still be saved.Speculation has already intensified around potential successors should a contest emerge.Health Secretary Wes Streeting is reportedly considering a leadership bid, although he is understood to have assured Sir Keir he would not personally trigger a challenge.Work and Pensions Secretary Pat McFadden and Communities Secretary Steve Reed have both publicly backed the Prime Minister.Chancellor Rachel Reeves has maintained a notably lower public profile following Labour's disappointing election performance.The internal divisions have also encouraged rival factions within the party to promote competing policy agendas.The Labour Growth Group published a reform manifesto calling for higher capital gains taxes, changes to inheritance tax rules, planning reform, greater devolution and measures aimed at reducing energy costs.Chris Curtis, Labour MP for Milton Keynes North and co-chair of the group, was among the more than 70 MPs who publicly broke with the Prime Minister on Monday.Mr Curtis said: It's time for us to look for new leadership.With multiple factions now advancing rival policy platforms and investors reacting sharply to developments in Westminster, expectations of a Labour leadership contest continue to build.Markets remain highly sensitive to any indication of further political instability within Government. Our Standards: The GB News Editorial Charter