Keir Starmer resigns as UK prime minister after two years, Andy Burnham set to take over

Keir Starmer announced his resignation as UK prime minister and Labour leader on 22 June 2026, ending a tumultuous two-year premiership and paving the way for the country's seventh leader in ten years. The move followed mounting internal pressure, catastrophic local election results, and a series of ministerial resignations.

Why Starmer fell

Starmer entered Downing Street in July 2024 with a sweeping electoral mandate, winning 411 seats for Labour. Yet that victory rested more on the collapse of the Conservative vote than on a transformative agenda. His government struggled to articulate a clear plan for the country, critics said, and was hit by weak economic growth, tax rises, and spending cuts that alienated both business and the Labour base. A controversial appointment of Lord Peter Mandelson as US ambassador, despite his ties to convicted sex offender Jeffrey Epstein, further eroded trust. By May 2026, Labour lost nearly 1,500 local council seats, and almost a quarter of Labour MPs demanded Starmer step down.

“Keir Starmer led us to a victory that nobody thought possible. He kept us out of the war in Iran and has made real progress as prime minister. He made the right decision to resign from the Labour leadership.”

The succession race

The immediate beneficiary is Andy Burnham, the mayor of Greater Manchester and a figure on the Labour left. Former health secretary Wes Streeting, who had resigned from the government and was expected to stand, withdrew and endorsed Burnham, saying he was convinced Burnham could build an inclusive party and defeat nationalist forces. No other candidate has yet formally declared, raising the prospect of a "coronation." Former deputy prime minister Angela Rayner and home secretary Shabana Mahmood are also mentioned as potential contenders, though Streeting's withdrawal makes Burnham's path significantly easier.

“Keir has offered a lot to our country and I want to thank him for his leadership, commitment and dedication in an extremely difficult period. I will be a candidate in this process.”

Market reaction

Investors are nervous. Matthew Ryan, Head of Market Strategy at Ebury, warned that Burnham's left-wing platform, past remarks that the UK should not be a hostage to bond markets, and the risk of looser fiscal rules under a new chancellor could trigger a sell-off in sterling and gilts. UK debt is at its highest share of GDP since the 1960s, growth is sluggish, and debt-servicing costs are already enormous, leaving virtually no fiscal headroom.

“The transition itself will bring a period of uncertainty that markets will find unpleasant. A prolonged internal contest or a policy vacuum until Burnham takes over could keep pressure on gilts and sterling, regardless of his eventual policy direction.”

What comes next

To become the official candidate, Burnham must secure the support of at least 20% of Labour MPs, around 81 members, plus backing from local party organisations and trade unions. If more than one candidate qualifies, the leadership will be decided by a ballot of party members and affiliated supporters. The process is expected to conclude by September, at which point the winner becomes prime minister. The timeline of British political instability, stretching from the 2016 Brexit vote to today, has now added another chapter.