Keir Starmer has now guaranteed that Labour will plunge into a civil war.
(The Daily Telegraph, Philip Johnston, 13 May 2026)
Prime Minister Keir Starmer, challenging rivals during the cabinet meeting to “step up or shut up,” repeated John Major’s mistake in 1995, only managing to prolong an agony already tearing the Labour Party apart. Instead of resigning with dignity after the disaster of the local elections, Starmer turned the crisis into an open confrontation, guaranteeing months of internal struggles just on the eve of the King’s Speech and while markets are already punishing instability with rising government bond yields.
Wes Streeting is preparing for a direct confrontation at Downing Street, while Andy Burnham is seeking a seat to re-enter Parliament and Angela Rayner is ready to run, in a climate where 92 MPs demand the Prime Minister’s resignation and 112 support him. The result is a paralyzed party, unable to govern and destined for a bloody civil war that will only benefit Reform UK.
Starmer, while declaring himself ready to take full responsibility, continues to blame voters and adherence to formal rules, showing he cannot read the discontent of the country and his own party, with the real risk of dragging Labour towards a historic defeat similar to that of the Conservatives after Major.
What stirs not only economic and financial matters in Starmer’s Labour government in the United Kingdom. Articles from the British press taken from Liturri’s review
Keir Starmer has now guaranteed that Labour will plunge into a civil war.
(The Daily Telegraph, Philip Johnston, 13 May 2026)
Prime Minister Keir Starmer, challenging rivals during the cabinet meeting to “step up or shut up,” repeated John Major’s mistake in 1995, only managing to prolong an agony already tearing the Labour Party apart. Instead of resigning with dignity after the disaster of the local elections, Starmer turned the crisis into an open confrontation, guaranteeing months of internal struggles just on the eve of the King’s Speech and while markets are already punishing instability with rising government bond yields.
Wes Streeting is preparing for a direct confrontation at Downing Street, while Andy Burnham is seeking a seat to re-enter Parliament and Angela Rayner is ready to run, in a climate where 92 MPs demand the Prime Minister’s resignation and 112 support him. The result is a paralyzed party, unable to govern and destined for a bloody civil war that will only benefit Reform UK.
Starmer, while declaring himself ready to take full responsibility, continues to blame voters and adherence to formal rules, showing he cannot read the discontent of the country and his own party, with the real risk of dragging Labour towards a historic defeat similar to that of the Conservatives after Major.
“Starmer challenges rivals like Major.”
“Like the Black Knight of Monty Python, Sir Keir Starmer lies bloodied and dismembered on the ground but determined to keep fighting. His challenge to cabinet colleagues recalled John Major’s ‘step up or shut up’ in 1995.”
“Guarantee of internal civil war.”
“Instead of leaving with grace and dignity, he guaranteed precisely the civil war he claims will destabilize the country. […] Instead of departing gracefully, he guaranteed the civil war he says he wants to avoid.”
“Streeting ready for confrontation.”
“Wes Streeting has set a showdown with Sir Keir Starmer on the day of the King’s Speech. The Health Secretary will enter Downing Street this morning to challenge the Prime Minister on his plan to save the party.”
“Burnham seeks return to Parliament.”em>
“Andy Burnham, Mayor of Greater Manchester, has met his supporters in London and is thought to have decided on the seat to contest in a by-election, which could be announced as early as today.”
“Rayner waiting.”em>
“Angela Rayner, former Deputy Prime Minister, is also considered a possible leadership candidate and is expected to run if Streeting launches a challenge.”
JP Morgan abandons a £3 billion plan in the UK if Labour shifts left.
(The Daily Telegraph, Tom Saunders, 13 May 2026)
JP Morgan CEO Jamie Dimon has threatened to cancel the £3 billion project for the new headquarters at Canary Wharf, London’s largest building, if the Labour government becomes hostile to banks again with new taxes or punitive measures. The warning comes as Sir Keir Starmer faces intense pressure to resign after the local election disaster, with Andy Burnham and Angela Rayner pushing for more radical tax increases and public spending policies.
A group of one hundred left-wing Labour MPs, led by Louise Haigh, is calling to relax fiscal rules and raise taxes on the wealthy, while markets react with a sharp rise in long-term gilt yields, reaching the highest levels since 1998. Investors fear that a shift to the left in leadership will worsen public finances management and increase debt close to £3 trillion.
British banks have already seen their stock prices fall due to fears of a surcharge increase from 3% to 5%, while JP Morgan reminds it has already paid $10 billion in extra taxes in the UK and warns that further tightening would make the country less attractive for foreign investment.
“Dimon ready to cancel investment.”
“Jamie Dimon has threatened to withdraw plans for the new headquarters if the government becomes hostile to banks again. […] If this happens too much, we will reconsider.”
“Starmer under internal siege.”
“Burnham and Rayner, both contenders to replace the Prime Minister, have called for more taxes and spending, while a group of 100 Labour MPs led by Louise Haigh demands a more left-wing economic policy.”
“Fear of a more radical Labour.”
“Rayner has requested in a confidential memo to raise the bank surcharge from 3% to 5%. Shares of Lloyds, NatWest, and Barclays fell on Tuesday amid fears of a new tax.”
“Markets punish instability.”
“UK financing costs have surged sharply. Thirty-year gilt yields rose to 5.81%, the highest level since 1998.”
“JP Morgan already a major taxpayer.”em>
“We have probably paid $10 billion in extra taxes so far. I don’t think it’s fair or right. If it happens too much, we will reconsider.”
Income tax increases mean an additional outlay of £900 for one million families.
(The Daily Telegraph, Emma Taggart, 13 May 2026)
Chancellor Rachel Reeves has decided to limit to £2,000 per year the pension contributions via salary sacrifice exempt from National Insurance, a measure that from April 2029 will affect 4.7 million workers and make one million families on average £888 poorer per year, according to the Institute for Fiscal Studies.
The highest earners will be the most penalized, while the average affected family will lose £540 annually, with repercussions also on employers who will have to pay more contributions and will likely recover costs by withholding wage increases.
The reform, among the most significant of the latest budget, should bring £2.6 billion to the Treasury by the early 2030s but risks further complicating the tax system and pushing many companies to eliminate salary sacrifice schemes altogether, just as millions of workers are already saving too little for retirement. Private sector employees will be hit more than public ones, with negative effects on competitiveness and growth.
“One in ten of the highest earners loses £888 a year.”
“The top 10% of earners have the most to lose from the reforms, with about one million families on average £888 worse off each year.”
“4.7 million workers penalized.”
“The Chancellor’s move will affect 4.7 million employees when it takes effect in April 2029.”
“Businesses forced to recover costs.”em>
“Companies will try to recover costs by withholding pay rises from employees. The policy affects not only those who contribute thousands of pounds to pensions but also those earning modest salaries.”
“Complication of the tax system.”em>
“The change will add complications to the UK tax system by requiring employers and HMRC to track and tax salary sacrifice contributions above the £2,000 threshold.”
“Effect on company pension plans.”em>
“The reforms risk pushing some companies to stop offering salary sacrifice schemes just as millions of people are already not saving enough for retirement.”
Starmer’s EU-UK reset at risk over disagreement on youth visa scheme.
(The Guardian, Lisa O’Carroll, 13 May 2026)
Keir Starmer’s attempt to revive relations with the European Union after the local election blow risks stalling precisely on the most symbolic dossier, the youth mobility scheme. The UK government insists on a strict cap below 50,000 visas per year for European young people under 30, while Brussels demands a mechanism without fixed numerical limits with only an annual “emergency brake,” also insisting on access to “domestic” tuition fees for EU students.
Negotiations have been stalled for weeks and European sources leak frustration: the EU is granting the UK agreements on SPS, energy, and emission quotas that favor British interests but receives nothing significant in return. Without an agreement on the youth visa, the bilateral summit scheduled for late June or early July could be canceled.
The disagreement risks causing the entire “reset” of relations to fail, while Starmer continues to publicly promise to put Britain “at the heart of Europe.” The outcome of the talks will also depend on the visa length and the possibility for young people to convert the experience into work permits or family reunifications.
“Disagreement on youth visa cap.”em>
“The government wants to limit the number of young EU citizens entering the UK as part of a post-Brexit youth mobility program to under 50,000, while the EU has already rejected a cap and wants unlimited visas with an annual review allowing an ‘emergency brake’ if politically desirable.”
“European frustration over poor return.”em>
“Other components of the reset, including health and phytosanitary agreements to reduce bureaucracy on food and drink, are all aimed at accommodating UK interests. People wonder: what does the EU gain from all this? There will be no summit if there is no agreement.”
“Starmer pushes for faster rapprochement.”em>
“We need to be closer to Europe. I want to be explicit about this, without holding back, without half measures in what I say.”
“Domestic tuition fees still an obstacle.”em>
“Ministers are unwilling to concede on the issue of ‘domestic’ tuition fees for EU students, which can reach £32,000-70,000 per year for internationals.”
“Real risk of reset failure.”em>
“Catherine Barnard, professor of EU law at Cambridge, said: ‘I fear things are still very complicated. I have heard nothing to suggest it is going better than a month ago.’”
UK borrowing costs soar amid uncertainties over Starmer.
(The Guardian, Julia Kollewe and Heather Stewart, 13 May 2026)
Long-term UK government bond yields surged yesterday to the highest level in nearly thirty years, with the 30-year gilt yield reaching 5.81%, up 14 basis points, due to strong investor concerns over a possible Labour leadership crisis and a potential shift to the left in fiscal and spending policy. Ten-year yields also briefly exceeded 5.13% before slightly retreating, reflecting fears that a leadership change could loosen budget discipline and push inflation higher.
Market turbulence was triggered by ministerial resignations and internal pressures on Starmer after the local election disaster, with investors and analysts fearing a possible more spendthrift successor like Angela Rayner or Andy Burnham. Uncertainty also pushed the pound down 0.7% against the dollar and raised oil prices, worsening inflationary pressures linked to the Middle East conflict.
The Prime Minister tried to reassure the cabinet by stating he will not resign and that the formal process to challenge him has not been activated, but analysts warn that a prolonged crisis or leadership change could further destabilize markets and increase borrowing costs for government, households, and businesses.
“Yield peak since 1998.”em>
“Long-term UK government bond yields surged yesterday to the highest level in nearly thirty years, with the 30-year gilt yield reaching 5.81%, up 14 basis points, due to strong investor concerns over a possible Labour leadership crisis.”
“Fear of a more left-wing Labour.”em>
“Any replacement would likely be left-wing and negative for the long end of the curve and the currency. Investors fear a new leader might loosen fiscal discipline and push inflation higher.”
“Starmer resists resignation.”em>
“The Prime Minister said he will not resign and that the leadership challenge process has not been activated. The country expects us to continue governing.”
“Effects on pound and oil.”em>
“The pound fell 0.7% against the dollar to 1.352, while oil prices rose with Brent at $106 a barrel due to tensions in the Middle East.”
“Analysts’ warning.”em>
“We could see a spike in long-dated gilts if this turns into a fight: political, fiscal, and inflation risks will increase. Markets do not like uncertainty about who governs.”p>
(Excerpt from the newsletter by Giuseppe Liturri)
