Britain is once again in a leadership crisis

British politics is currently facing a highly turbulent environment, with Prime Minister Keir Starmer under severe political pressure. Although about a quarter of Labour Party MPs have urged him to resign from his post, he has decided to remain as Prime Minister.

However, how long this leadership crisis will drag on has now become a major issue in the country's political arena.

Wes Streeting, who resigned as Health Secretary last Thursday, severely criticized Prime Minister Starmer's leadership. Although he wanted to call for a leadership contest immediately, he has not yet been able to secure the necessary support of 81 Labour Party MPs for it. Nevertheless, Streeting confirmed last Saturday that he would stand if a leadership contest officially began.

Meanwhile, Andy Burnham, the Mayor of Greater Manchester and an extremely popular politician within the Labour Party, is preparing to run for the party leadership. Polls show that he is more popular than the current Prime Minister, as well as the leadership of the right-wing 'Reform U.K.' party led by Nigel Farage, an ally of Donald Trump. However, to contest the party leadership, he must hold a parliamentary seat. For this, a Labour Party MP representing the Makerfield constituency in Northwest England has agreed to resign, and Burnham plans to contest the by-election held there.

Further exacerbating the political unrest in Britain last weekend, thousands of far-right protesters, led by anti-Islam activist Tommy Robinson, marched through central London. During these protests, chanting slogans like 'Unite the Kingdom' and 'Make Britain Great Again,' they called for the preservation of white British culture and an end to immigration. Concurrently, a group of anti-racist and pro-Palestinian activists also organized another protest, raising their voices against the racist policies of the 'Reform U.K.' party.

The Labour Party's National Executive Committee, which had previously not allowed Burnham to contest an election without resigning from his mayoral post, approved his request last Friday. Accordingly, the by-election for the Makerfield constituency is highly likely to be held on June 18 or June 25. This election will be a critical one for Burnham as well as for the Labour Party, carrying both high risks and high rewards.

Although the Makerfield constituency has been a Labour Party stronghold for decades, the influence of the 'Reform U.K.' party has grown significantly there, securing 23% of the votes in the last election. If Burnham wins this, he will become the frontrunner to replace Prime Minister Starmer as party leader. However, investors fear that Burnham's left-leaning tendencies and policies to increase spending on public services could lead to a higher government debt burden. This has caused British government bond prices to fall and borrowing costs to rise.

If Burnham is defeated in this election, it would be a severe blow to the Labour Party, which might temporarily secure Prime Minister Starmer's position. Starmer currently states that political instability should not arise in the country amidst the Middle East and Ukrainian war situations. Nevertheless, if a leadership contest occurs, in addition to Wes Streeting, who represents the right wing of the party, other prominent Labour Party politicians such as former Deputy Prime Minister Angela Rayner, who has been cleared of a tax issue, and Energy Secretary Ed Miliband, are also likely to contend.