British political earthquake imminent? Prime Minister Stammer may announce resignation on Monday, UK bond rates price in regime change

The British political arena is facing the most intense power transition in recent years. According to foreign media reports on the 20th, Prime Minister Starmar is preparing to announce his resignation timetable, and senior members of the Labour Party expect him to make a "clear statement" as early as the 22nd (Monday). This news has put the market on edge - with the yield on the 10-year UK government bond climbing to 4.84% last Friday, investors are anxiously awaiting political signals at the opening on Monday. Starmar's political predicament escalated further last week. Former Mayor of Greater Manchester, Andy Burnham, won a landslide victory in the Makerfield by-election, receiving 54.8% of the votes, a margin of 9,231 votes over the Reform Party candidate. This victory secured him a seat in the House of Commons and cleared the way for a leadership challenge. According to reports citing sources within the Labour Party, Burnham's supporters claim to have the endorsement of over 201 Labour MPs, more than half of the Labour parliamentary group, making Starmar's situation even more difficult. British Transport Minister Heidi Alexander publicly urged Starmar to set a resignation timetable on the 19th. While Starmar himself stated that he would participate in a leadership contest if it occurred and reiterated that he would not "just walk away", reports indicate that he then spent the weekend at his country residence Chequers reflecting on his political future with his wife. The market has already priced in the political risks The bond market was the first to react. The yield on the 10-year UK government bond rose by about 9 basis points to 4.84% last Friday, as traders factored in Burnham's victory, domestic political uncertainty, and the potential shift in fiscal policy that could come with a change in leadership. Since the market is closed over the weekend, the next key time window will be the opening on Monday. If Starmar makes a resignation statement at that time, the news will directly impact market trading. Burnham is scheduled to be sworn in as an MP on Monday and is set to meet with Starmar earlier this week, with a cabinet meeting scheduled for Tuesday. Labour insiders expect the power handover not to create an immediate vacuum, but rather a "orderly phased exit" - the most likely scenario is to set the handover time around the time of the September party conference. How Starmar's authority crumbled Starmar's political predicament did not emerge overnight. The erosion of his authority can be traced back to a decision in December 2024 - appointing Peter Mandelson as the ambassador to the US, despite the fact that the latter's longstanding relationship with the late sex offender Jeffrey Epstein was public knowledge. Mandelson was dismissed from the ambassadorship in September 2025, and later arrested on suspicion of passing sensitive government information to Epstein during the financial crisis of 2008 to 2010, under the charge of "misconduct in public office". Mandelson denied any wrongdoing and has not been formally charged, as police investigations are ongoing. Starmar initially claimed that Mandelson had concealed relevant information from him during the appointment process, but subsequent reports showed that he was aware of the friendship between the two. This event set off a chain reaction: Starmar's chief of staff Morgan McSweeney resigned in February, and a senior official at the Foreign Office also resigned, as the government faced continued pressure over document disclosures, review controversies, and integrity investigations. Betrayal within the party, pressure from all sides Internal division within the Labour Party is rapidly mounting. Shadow Justice Secretary and Member of the House of Lords, Lord Falconer, told the BBC that Starmar "has completely lost authority, because everyone believes that Andy Burnham is about to launch a leadership challenge, and everyone believes that he will win". Trade unions have also made their position clear. Unite union secretary Sharon Graham bluntly stated that "Starmar clearly needs to leave", and called for an orderly transition under a clear timetable, while also starting discussions on Labour Party policy priorities. Former Health Minister Wes Streeting is seen as another potential contender within the party. According to reports, he has rented an office for 40 staff as a campaign headquarters and received two donations of 50,000 each from key Labour donors. However, some senior Labour figures believe that Streeting may ultimately choose to reach an agreement with Burnham rather than confront his strong momentum head-on. Burnham: the "Northern King" waiting to enter the stage Burnham's victory speech was ambitious, although he has not formally announced his candidacy. He told supporters that "tonight may - just may - be a turning point", and warned the Labour Party that this is "the last chance to change", and there won't be a second chance. Under Labour Party rules, any challenger only needs the nomination of 20% of Labour MPs (currently about 81 people), along with the necessary support from local party branches and affiliated organizations, to launch a formal challenge. Burnham's supporters claim to have far exceeded this threshold. Currently, the rumors of resignation at 10 Downing Street are classified as "speculation," as Starmar's team insists that he will respond to any challenge. But the political reality is quite harsh: Burnham has secured a seat, his allies claim to have enough support, cabinet members and trade unions are shifting their allegiance, and the ongoing threat of the Reform Party is convincing more and more Labour MPs that only Burnham can effectively address it. If Starmar steps up to the podium on Monday to announce a resignation timetable, it will mark the end of an extraordinary political journey - from an overwhelming victory less than two years ago to a forced exit, the gateway for this "Northern King" to enter may open from there. This article is a reprint from "Wall Street see"; Author: Zhao Ying; GMTEight editor: Chen Xiaoyi.