Keir Starmer Resigns as UK Prime Minister — Here’s How Markets are Reacting

TLDR

UK Prime Minister Keir Starmer announced his resignation on Monday after pressure from Labour lawmakers Andy Burnham is the frontrunner to succeed him as the next prime minister The pound fell 0.1% to $1.3220 following the news The FTSE 100 dropped 0.1% in morning trading Markets are now focused on who will become the next Chancellor and whether fiscal rules will be maintained

---

Keir Starmer resigned as UK Prime Minister on Monday, June 22, less than two years after taking office.

BREAKING: Keir Starmer gets emotional as he resigns as Prime Minister

"I shall spend more time on the most important job. Being the best husband I can to my fantastic wife Vic… and being best dad I can to my beautiful children, who have been my pride and joy" pic.twitter.com/3OaOMTqPLQ

— Politics UK (@PolitlcsUK) June 22, 2026

Starmer made the announcement outside 10 Downing Street. He said he had heard the answer from his parliamentary party about whether he was the right person to lead Labour into the next general election, and accepted that answer.

The announcement followed a weekend Starmer spent at Chequers, the Prime Minister’s country residence, considering his future.

He had faced growing pressure from Labour lawmakers over the weekend to step down. Ministerial allies and Number 10 staff gathered in Downing Street shortly before 9:30am on Monday, signaling the resignation was coming.

Markets React With Caution

Markets showed a relatively calm response to the news, which many had anticipated.

The pound fell 0.1% to $1.3220 against the US dollar. The yield on the 10-year UK government bond rose slightly to 4.85%.

The FTSE 100 was down 0.1% in early trading. Analysts described the market reaction as muted.

What Happens Next

Starmer said he asked Labour’s National Executive Committee to set a timetable for a leadership contest. He wants a new leader in place before Parliament returns from summer recess on September 1.

Nominations are set to open on July 9, the day after Starmer returns from a NATO summit in Turkey. They will close around July 16.

Starmer will remain as Prime Minister until a new leader is chosen.

Andy Burnham, the former Mayor of Greater Manchester, is widely seen as the frontrunner. He is expected to arrive in Westminster on Monday to be sworn in as an MP after winning the Makerfield by-election.

Online prediction market Polymarket puts the probability of Burnham becoming the next prime minister at 96%.

Former Health Secretary Wes Streeting is also expected to enter the race.

Burnham has previously said the government should not be “in hock” to the bond market, suggesting he would support looser spending. He has since taken a more market-friendly stance, bringing on a former Bank of England chief economist as an advisor.

The choice of the next Chancellor is now the key question for markets. ING analyst Francesco Pesole said markets would look for fiscal reassurances from whoever fills that role, similar to those provided by outgoing Chancellor Rachel Reeves.

Reeves had committed to strict fiscal rules, which helped keep bond markets calm after the 2022 turmoil triggered by former Prime Minister Liz Truss’s mini-budget.

The UK will now have its seventh prime minister in ten years.

The post Keir Starmer Resigns as UK Prime Minister — Here’s How Markets are Reacting appeared first on CoinCentral.