(Sharecast News) - Embattled UK Prime Minister Keir Starmer on Tuesday refused to resign despite growing calls from within his own ruling Labour Party to step aside - effectively laying down a challenge to potential rivals to unseat him.
After a hammering at local elections last week to compound months of policy failures and plunging popularity, at least 70 lawmakers and ministers overnight called on Starmer to go and one junior minister quit on Tuesday.

However, at a Cabinet meeting in Downing Street on Tuesday, Starmer remained defiant, saying he took responsibility for the election results and "delivering the change we promised".

The news saw a rise in gilt yields and a falling pound on the growing political uncertainty as traders feared a new administration could relax the government's self-imposed fiscal rules and lift public spending. The 30-year bond yield was up 13 basis points at 5.803%, the highest level since 1998.

"The past 48 hours have been destabilising for government and that has a real economic cost for our country and for families," Starmer said in a statement released by Downing Street.

"The Labour Party has a process for challenging a leader and that has not been triggered. The country expects us to get on with governing. That is what I am doing and what we must do as a Cabinet."

XTB research director Kathleen Brooks said UK bond yields were facing a "double whammy" of an energy price spike and a political crisis.

"The risk is that we get a bond market meltdown in the UK in the coming days. If that happens, will it quiet the factions of the Labour party who have threatened to ignore the bond market, ditch fiscal rules and boost public spending even more?"

RESIGNATIONS & CHALLENGERS

By 1630 BST four junior ministers had resigned from the government: Communities minister Miatta Fahnbulleh, safeguarding minister Jess Phillips, Alex Davies-Jones, the minister for victims and Zubir Ahmed, health minister while one of the prime minister's closest aides declined to say whether he would lead Labour into the next election.

Darren Jones, a close ally of Starmer and his chief secretary said the prime minister was "listening to colleagues" who were asking him to set out a timetable for departure but would make his own decisions about the future.

Any challenger would have to garner the support of 81 MPs to launch a leadership bid, with the Health Secretary Wes Streeting seen as a main contender, although he has said in the past that he would not make a move but would join a contest if it was already taking place.

More than 80 MPs have signalled that Starmer should go, but so far no-one has stepped forward to say they would be prepared to trigger a leadership ballot. More than 100 of the PM's allies signed a letter late on Tuesday saying: "This is no time for a leadership contest."

"Last week we had a devastatingly tough set of election results. It shows we have a hard job ahead to win back trust from the electorate. That job needs to start today - with all of us working together to deliver the change the country needs. We must focus on that."



Reporting by Frank Prenesti for Sharecast.com

• News Channel