In parliamentary democracies, leadership challenges often trigger significant economic consequences, as political uncertainty can increase government borrowing costs and market volatility, demonstrating how political instability directly impacts economic stability.
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Are these the front runners to challenge Sir Keir Starmer?Added:
Now to try to get a handle on what might happen next, Harry has been talking to the teams around the pretenders to secure's crown. Both Wes Streeting and Andy Burnham are ready to declare their hands. Uh but both are said to be reluctant to be the first. Let's go to Harry back in the studio. Harry, over to you.
>> Well, the two apparent front runners at this stage are the health secretary West Streeting and Andy Bernham, the mayor of Greater Manchester. Now, West Streeting was one of several cabinet ministers who tried to speak to the prime minister after cabinet today, but Kstama, we're told, declined. Tomorrow, the pair will meet, although I'm told they plan to keep quiet afterwards to avoid any distractions from the king's speech.
This afternoon, in perhaps the strongest show of support so far for West Streeting, the home office minister Jess Phillips, a key ally of his, resigned from government when she issued a blistering letter earlier today.
Meanwhile, Andy Burnham, he took a train down to London today. His team say he wasn't meeting any MPs, isn't planning any imminent campaign launch, but one of his supporters, the local government minister, Miata Famble, we just heard from her in Romy's report. She also resigned from government today and said she wants to see Andy Burnham back in parliament. Now, I've spent all day speaking to both of these camps. Neither are saying anything in public. Both insist they didn't plan for things to pan out like this this week. But for now, nobody seems to want to make the first move. And then there's Angela Raina. She's indicated her support for Andy Bernham. If he fails to find himself a parliamentary seat, she might end up standing herself. And then if a contest is triggered, we could see lots more candidates put their names forward.
The defense secretary, John Healey, perhaps the home secretary, Shabbana Mammud, Ed Milliband, a former Labour leader, he might put his name forward.
And the defense minister, Al Kahn, a wild card perhaps. Tomorrow there is likely to be some sort of truce while the king's speech is going on. Will West Streeting back down? Will backbench MPs start plotting once they're all back in Westminster? This could all drag on until someone decides they're prepared to challenge the prime minister directly.
>> Uh, will MPs start plotting? Harry, I think a rhetorical question there from there. You know, listen, I've joined by Robert and Joel, as you can see, to talk politics and economics. First question to you, Robert. Is the prime minister safer tonight than he was this morning?
Well, look, last night ministers thought they were going to have a painful open conversation with the prime minister at cabinet about, you know, whether he should set a timetable to go.
>> Totally preempted them. He actually briefed all of us, his opening statement, which was he's not going anywhere. Uh, and the whole question of his leadership isn't going to be talked about unless and until somebody like Wes Streeting, you know, puts up or shuts up. uh uh in other words uh resigns and then challenges him and at that point the cabinet had absolutely no choice but to talk about other things. move on and pretend in public that maybe it's going to be all right though privately they say to me he is still in really great difficulties because we can see you know the parliamentary Labour party is totally split you know there are sort of 90 plus MPs who've said they want him to go maybe a hundred written this letter who support him there's quite a lot we don't know about but among those hundred who support him you know as every hour goes by somebody says oh I didn't think I'd signed that letter and they take their name off. So, you know, he he gets a a day's grace tomorrow because everybody has agreed when that they're not going to humiliate King Charles by talking about replacing, you know, his King Charles's prime minister tomorrow back. But but when we get to Thursday again, you know, there may well be other resignations of ministers. There may well be other MPs coming out saying they don't support um uh Star anymore. And most importantly, we will hear from West Streeting who will meet the prime minister tomorrow and tell us on Thursday whether he is now going to resign and challenge him to be prime minister.
>> Joel, I guess one of the things people find aggravating about this is it's not just politics, it's economics, too.
Particularly the cost of government borrowing and it's all feeling a bit Liz trust, is it not?
>> Well, we're not in trust territory yet. But markets aren't in in sort of complete panic, but the pressure is definitely building and successive governments over decades have always spent more than they've raised in tax and used investors like pension funds and uh banks and insurers to effectively lend them money to to fund the difference. So the market view really really does matter. And today amid all the turmoil um you saw the value of the pound slip and investors were selling UK government debt. Now, the government can still raise money easily enough. It's just being charged much more to do so. Now, over the last two days, you've seen the effective interest rate that the government pays to borrow money over a 10-year period edge up by about 0.2 percentage points, which sounds absolutely tiny, but it adds 3 billion pounds a year to the government's annual interest bill.
That's enough to employ tens of thousands of NHS workers. If you go uh back not so far, I mean, the UK is now got the highest borrowing costs of the G7. uh and that's been the case for the last two years. Go back four years and actually the likes of Canada, the United States and uh Italy were being charged much more than we were to borrow money.
So this is a material difference. Now, one of the reasons things have changed is that the UK is perceived as being more exposed to the inflation that the war in uh Iran is causing and that interest rates here therefore are going to have to be higher for longer. But there's no question that the the mayhem in Westminster is a a factor here. Uh Paul Dales from Capital Economics is play politics is playing a huge part here. He and many many analysts Tom think the markets are pricing in an increased probability that crea karma will be replaced by someone who's likely to borrow more and that that will put further upward pressure on inflation and on interest rates going forward. That's an educated guesswork, but the bond yield increase is real. So are the consequences for households in particular. Watch what happens to them mortgage rates over the next few days if this continues.
>> Okay, Robert, one very quick final question to you. You mentioned Thursday.
Does your gut tell you where's people say now or never for West Streeting?
Does your gut say he goes for it in stands or to be >> honestly I don't know. There's a lot of briefing going on tonight from both sides. Uh people, you know, connected to the man in there are briefing that he's bottled it, that he doesn't have the numbers, and therefore he's going to sort of sling away with his tail between his legs. Talking to people close to Wes Streeting, they say this is absolute nonsense. uh that he's very much looking forward to hearing from the prime minister tomorrow how he plans to revive his party's fortunes and show the boldness that's required to revive the economy and the implication of that is he goes in slightly doubting that he will be persuaded by the prime minister at that point um he will do what his supporters want him to do which is resign and turn to prime minister so you know the stakes are very high um I'm not going to put a probability on which way it is going to go. But I have to say if he does stand, we know that he will challenge. We're into a very big moment.
Well, indeed we are. And here in the harsh light of day this morning, Robert summed up Saki Star's attitude to those who might want to challenge him as sticking two fingers up to them. You can hear his other uh choice comments about the prime minister staying put in our latest very lively episode of Talking Politics. watch on ITVX or YouTube or listen wherever you like to get your podcasts. Now, one British political leader did get a new job today in a nice orderly way. Pied Camry's Rein Abureth uh was voted in as the first minister of the Wel Welsh Senate breaking Labour's hold on the top job for the first time.
>> Reiner.
>> Unlike in Westminster, there was little drama in Cardiff Bay today.
But this was a huge moment in Welsh political history.
>> The man who broke Labour's iron grip on Wales is clearly enjoying his moment.
>> Something has stirred in the soul of Wales.
>> Throughout the campaign, Plight Cumbri's leader was eager to play down talk of independence, but opposition parties fear an emboldened Trina Bureworth will soon put it back on the agenda. The reform would certainly lead the charge against any efforts to spend taxpayers money on independence and we will work with the other pro-UN parties to achieve that.
>> Getting that message across to people.
>> In the final week before polling day, we joined Plight Cumbri's leader on the campaign trail in Cardiff.
>> How long has this business been uh been here?
>> It was in those final days that the polls turned decisively in his favor. We returned today to speak with some of those he met.
>> So, which way have you voted before?
>> Uh voted Labor previously. Yeah. But this time you went for plighted Cry.
>> Yeah, Plight. Yeah. So, uh when he came in last time, um he looked like he wanted the best for the community and hopefully uh he he break the cracks on and uh does a great job at it.
>> Plighted Cumbry have always struggled for support outside of their western Welsh speaking heartlands. But last week they finally broke through in cities like Swansea and here in Cardiff where they won half of all the seats available. After a slight delay in receiving the Royal Seal of Approval, the first minister eventually emerged from Welsh government headquarters to speak with the press.
>> This has been a truly momentous uh day, a historic day, a shift I hope in the way that Wales is governed. You're one of three uh separatist administrations across the UK. Now, what message will the three of you be giving to the prime minister of the UK?
>> Um my loyalty in all my time as the first minister of Wales will be to the people of Wales. Yes, that means working with others where we have common ground across these islands, but with my loyalty always to the citizens of this nation. The first steps into government are the easy ones, but turning around Wales's flagging public services will be a much sterner test. Fe Williams, News at 10, Cardiff.
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