(Bloomberg) — Keir Starmer was facing growing pressure to step down as Britain’s prime minister after dozens of members of Parliament, including Cabinet allies, joined the calls for him to set out a timetable for his departure.

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Those privately urging Starmer to consider plans for handing control to a successor included Home Secretary Shabana Mahmood, according to people familiar with the matter. Her intervention followed a similar overture by Energy Secretary Ed Miliband in recent weeks, suggesting that the Cabinet support that had so far protected Starmer’s position was ebbing away.

Darren Jones, chief secretary to the PM, said Tuesday that Starmer was considering his options. “He’s listening to colleagues, and he’s talking to colleagues,” Jones told Times Radio. “I can’t say what decision he may or may not take.”

More than 70 of Labour’s 403 MPs have called on the prime minister to step aside in the wake of last week’s local elections, in which the party lost control of the Welsh parliament and almost three of every five English council seats it was defending. The prospect of selecting a new leader has exposed a deep factional divide in the governing party between those who favored a center-left candidate similar to Starmer and those who want a standard-bearer who could better unite the left.

The pound extended losses on Tuesday morning, down more than 0.5% to $1.3536 having traded above $1.3650 the previous day. Gilts came under further pressure, with the yield on 10-year notes jumping beyond 5.10% on Tuesday as bond investors expressed concern that any replacement for Starmer would increase fiscal spending, potentially driving borrowing costs higher. The yield on 30-year debt hit its highest level since 1998.

Some Labour MPs are now talking down the prospect of higher spending despite many of the party’s critics of Downing Street calling for a more relaxed approach to borrowing at various points since Starmer was elected in 2024.

“I don’t think there’s anyone who’s seriously asking for large unfunded pledges,” said Yuan Yang, a Labour MP on parliament’s Treasury Committee. “We understand the importance of fiscal rules, we understand the importance of getting down the cost of borrowing.”

Still, others on the left of Labour are touting various ways to boost public services.

The rebellion sets up a dramatic scene in Downing Street on Tuesday morning, when Starmer is due to chair a regularly scheduled Cabinet meeting. Some Cabinet ministers such as Housing Secretary Steve Reed and Attorney General Richard Hermer were said to be urging the prime minister to fight on, while others like Foreign Secretary Yvette Cooper and Defense Secretary John Healey were said not to be pushing him either way.

No. 10 Downing St. declined to comment on the latest developments.

At least one minister expected to be seated around the Cabinet table, Health Secretary Wes Streeting, has been preparing for months to seek Starmer’s job if the opportunity presented itself. A ministerial aide of Streeting’s and his constituency neighbor joined the calls for the prime minister’s exit, fueling speculation that the health secretary was preparing to seek the premiership.

A turbulent day began with a speech in which Starmer vowed to prove his doubters wrong and stay in office. He warned the party against repeating the mistakes of the former Conservative government that cycled through five prime ministers in the years after Britain’s exit from the European Union.

“What we witnessed with the last government was the chaos of constantly changing leaders,” Starmer said. “And it cost this country a huge amount, a huge amount.”

But Labour lawmakers said the speech failed to present a turnaround on the scale necessary to show the prime minister had a plan to turn back the advance of populist rivals like Nigel Farage’s Reform UK and Zack Polanski’s Greens. The number of MPs calling for his departure steadily rose throughout the day.

Asked whether Cabinet members were planning to tell Starmer to resign at that meeting, Care Minister Stephen Kinnock — who does not attend Cabinet, but serves under Streeting in the health ministry — told the BBC, “they may well do.”

He added: “I just hope that they really will take a beat, pause, reflect, and think about the potential that that has for chaos that might be unleashed.”

The calls for a timetable revealed a rift in the Labour Party and who they preferred to take over. Those favoring Andy Burnham sought an “orderly transition,” which would give the Greater Manchester mayor more time to secure a seat in Parliament, while others backing Streeting urged a faster process. Burnham is seen as a member of the party’s so-called soft left and Streeting hails from a more centrist wing of the party.

While Streeting remained silent on Monday, his ministerial aide said there should be a “swift timetable” to replace the prime minister. Labour figures said that calls by known allies of Streeting for Starmer to go appeared to be an orchestrated effort to build momentum against the premier in order to give the health secretary cover to announce a challenge — something an ally of Streeting denied.

Still, one senior lawmaker from the soft left faction warned that any contest that didn’t include Burnham would be seen as illegitimate, and even if Streeting won it he would be vulnerable to fresh challenge.

What Bloomberg Economics Says…

“Political uncertainty, and the risk of a new leader who is more fiscally profligate, were already putting upward pressure on gilt yields. A leadership contest would likely see that trend intensify, acting as yet another headwind to an economy which is set to struggle this year in the face of the energy shock.”

—Dan Hanson and Antonio Barroso, Bloomberg Economics. Read the full INSIGHT on the Terminal.

Burnham’s allies expect in the coming days to be able to set out a path for him to return to Parliament in order to be eligible to stand in any leadership contest. His backers said a sitting MP in the north-west of England is likely to soon stand down, giving him an opportunity to apply to be the Labour candidate in the ensuing by-election. That would set up a clash with Starmer’s allies on Labour’s National Executive Committee, who blocked him from running in a by-election earlier this year.

Burnham pulled out of a long-planned speech at a London conference on Tuesday without explanation. It was unclear if he had done so because he is preparing to make an intervention, or because he was not yet ready to address his intentions in public. A spokesperson for Burnham declined to comment.

Angela Rayner, another possible contender, made her second public remarks in two days on Monday, but again stopped short of saying she wanted to challenge Starmer for his job. She endorsed Burnham’s return to Parliament, leading some MPs to conclude support has fallen away from her in recent weeks and that she is now hoping to be the junior partner on a Burnham ticket.

Starmer started the day cautioning Labour that replacing him risked plunging the party into disarray. That was a warning that appeared prescient just hours later.

–With assistance from Lucy White, Alex Morales and Alice Gledhill.

(Updates with developments from fifth paragraph.)

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