The UK government is facing growing political uncertainty as Prime Minister Keir Starmer comes under mounting pressure from within the Labour Party amid reports of a potential leadership challenge from Greater Manchester Mayor Andy Burnham.
The crisis deepened after Labour suffered heavy losses in recent local elections, with voters shifting towards both Nigel Farage’s Reform UK party and the Green Party.
Burnham has signalled his intention to challenge Starmer for the Labour leadership, although he must first secure a return to Parliament before formally launching a bid.
His route back to Westminster remains uncertain, as he would need to win a special election in the Makerfield constituency — an area where Reform UK recently made significant gains.
Financial markets reacted nervously to the growing instability within government, with UK borrowing costs rising and the pound weakening against the US dollar.
Sterling has fallen by 1.4% against the dollar this week as investors voiced concerns over continued political disarray in Westminster.
Speculation surrounding Starmer’s future escalated on Thursday after Burnham openly declared his intention to seek the party leadership, while other senior Labour figures also began positioning themselves for possible campaigns.
The pressure intensified further following the resignation of Health Secretary Wes Streeting, who became the first Cabinet minister to quit the government during the crisis.
In a sharply critical resignation letter, Streeting praised Starmer’s handling of international affairs but said he had lost confidence in the prime minister’s domestic leadership.
“Where we need vision, we have a vacuum. Where we need direction, we have drift,” Streeting wrote.
“Leaders take responsibility, but too often that has meant other people falling on their swords,” he added.
Streeting also criticised what he described as a “heavy-handed approach” towards dissenting voices inside the party.
Meanwhile, Housing Secretary Steve Reed urged Labour members to avoid a damaging leadership battle that could weaken the government further and strengthen Reform UK.
“This weekend people just need to take a breath, look at what’s gone wrong this week, and come back next week ready to do what we said we’d do — country first, party second — and focus on delivering the change we were elected to deliver,” Reed told the BBC.
Burnham’s attempt to return to Parliament gained momentum after Labour MP Josh Simons resigned his seat in Makerfield to create an opening for the Greater Manchester mayor.
However, Burnham acknowledged the challenge ahead as he officially confirmed his intention to contest the constituency.
“I truly do not take a single vote for granted and will work hard to regain the trust of people in the Makerfield constituency, many of whom have long supported our party but lost faith in recent times,” he said.
The coming weeks are now expected to prove critical for Starmer’s leadership as Labour struggles to contain internal divisions and mounting electoral pressure.