Prime Minister Keir Starmer has pledged to crack down on a series of damaging leaks from within Downing Street, acknowledging that speculation over his own position as Labour leader is now "rife". His commitment comes alongside a stark financial warning that a change in Prime Minister could trigger panic in the bond markets, reminiscent of the crisis under Liz Truss.
PM's Pledge on "Intolerable" Leaks
Speaking to the Liaison Committee, a powerful group of select committee chairs, Starmer described the recent spate of unauthorised briefings as "completely unacceptable" and "intolerable in any organisation". He was questioned specifically about media stories in November which contained negative briefings against Cabinet colleagues, including Health Secretary Wes Streeting, and Labour backbenchers.
"I'll get to the bottom of these leaks," Starmer stated firmly. He revealed that a formal leak inquiry is underway and vowed to follow the evidence wherever it leads, promising to act on its conclusions. The Prime Minister drew a parallel with his previous role, noting, "I took the same action when I was head of the Crown Prosecution Service."
He also addressed a separate Treasury inquiry into Budget leaks, which saw confidential details about tax and forecast plans appear in the press. Chancellor Rachel Reeves stated last week that she did not authorise the leaks concerning income taxes reported by the Financial Times, labelling the information as "inaccurate".
Bond Markets Warn of Leadership Change Risk
The internal Labour turmoil coincides with a significant warning from the City about the potential economic fallout of a change in leadership. Simon French, chief economist at Panmure Liberum, cautioned that if Starmer were replaced by a leader from the party's soft left, it could spark "loud echoes" of the bond market rout experienced during Liz Truss's mini-Budget crisis in 2022.
French explained that traders are concerned a new Labour leader might abandon current fiscal rules to borrow more for public spending. He suggested the May elections could be a decisive moment for both the Prime Minister and the government's standing with lenders. His analysis warned that such a shift could drive short-term gilt yields to their highest level since 2028, significantly increasing borrowing costs for taxpayers.
This financial alert followed weekend speculation—strongly denied online by the individual involved—that Manchester Mayor Andy Burnham was seeking a return to Parliament to challenge Starmer.
Starmer Confronts "Rife" Speculation
When directly asked if the chatter about his leadership was merely party political noise, Starmer gave a candid response: "No. I'm not sure I can. It seems to be pretty rife." He defended his handling of the situation, stating he did not take the coordinated evening briefings against Wes Streeting "at face value" and had examined other evidence before making public statements.
The issue has already caused political damage, with Opposition Leader Kemi Badenoch grilling Starmer on an apparent Cabinet split during a recent Prime Minister's Questions session. The negative briefings have also angered Labour MPs who were described as "feral" in some reports.
As the Prime Minister moves to shore up his authority internally, the parallel warnings from the financial markets underscore the high stakes involved, linking Westminster instability directly to the UK's economic stability and the nation's borrowing costs.
