WES Streeting’s bid to succeed Sir Keir Starmer as Labour leader suffered a significant setback after a recent poll of party members showed widespread disapproval of his decision to resign as Health Secretary last week in an effort to challenge Starmer’s leadership. According to a YouGov survey, nearly 60 percent of Labour members believe Streeting made a mistake in stepping down, while close to 70 percent said they would support Starmer over Streeting in a leadership contest. Only 15 percent backed Streeting as the preferred challenger.

Streeting, the MP for Ilford North, had criticised Starmer for lacking strategic vision but has yet to formally launch his leadership campaign, with some critics suggesting he has struggled to secure sufficient backing within the parliamentary party. The poll also indicated a stronger positive response among members toward alternative potential leadership candidates. More than 60 percent of Labour members want Starmer to resign before the next general election, regardless of any leadership challenge.

Among those viewed favourably by Labour members are Andy Burnham, the former Mayor of Greater Manchester who is contesting the upcoming Makerfield by-election, with nearly 75 percent support. Other figures enjoying positive ratings include Deputy Leader Angela Rayner (80 percent), former Labour leader Ed Miliband (77 percent), and MP Yvette Cooper (73 percent).

Meanwhile, concerns over the UK’s economic outlook were underscored by the International Monetary Fund’s (IMF) latest assessment. The IMF advised that any incoming Labour government would need to address rising welfare costs and reduce government borrowing at a time when tax increases have approached historic highs. Since taking office, Chancellor Rachel Reeves has implemented £75 billion in tax increases, pushing the tax burden to levels unseen since World War II.

The IMF expressed limited scope for further tax hikes and emphasised the need for stringent control of public spending, particularly in welfare. It warned that domestic political uncertainty could exacerbate the already volatile global economic environment, potentially dampening consumer spending and investment. Financial markets have demonstrated heightened sensitivity to the possibility of a Labour shift toward increased borrowing and left-wing spending, with yields on 30-year government bonds briefly exceeding 5.8 percent—the highest in a quarter-century—before retreating.

Following Burnham's rejection of plans to alter fiscal rules if elected, some market volatility eased, and sterling strengthened. The IMF revised its UK growth forecast upward to 1 percent for 2024, from an earlier 0.8 percent projection, but cautioned that inflation is likely to peak just below 4 percent by year-end, nearly double the government’s target.

The report also highlighted long-term fiscal pressures stemming from demographic changes, defence commitments, and climate transition policies, stressing the difficulty of balancing competing public priorities. The IMF’s UK mission chief, Luc Eyraud, stressed the importance of policy consistency amid a “shock-prone world,” while financial analyst Susannah Streeter described bond investors’ reactions as an early warning signal of market concerns about Labour’s fiscal approach.

Chancellor Reeves defended the government’s economic strategy following the IMF’s more positive growth outlook, asserting that it validated the current administration’s plan. The Labour leadership contest and economic challenges are set to remain central issues as the party prepares for upcoming elections and grapples with internal divisions over direction and policy.