Bruising brushes with financial markets have been the fate of Labour “down the ages”, said William Keegan in The Observer. Back in the 1960s, Harold Wilson complained about “the gnomes of Zürich” – a derogatory reference to international bankers then going “short on the pound”. This time, the threat is closer to home – in London’s febrile government bond markets.

‘The risk of some kind of accident is real’

Before this week’s escalation of the leadership fight, economists were playing down the political angle. “For all the noise, politics isn’t what’s driving yields higher right now,” James Smith of ING told The Times. “The overwhelming driver is still the energy crisis, oil prices and the impact on BoE interest rates.” But as a dramatic sell-off got under way, it became harder to discount the sense that debt markets are indeed badly rattled by Labour’s leadership woes. The 30-year gilt yield, which hit 5.81% on Tuesday, is at the highest this century. Yields on 10-year gilts (the benchmark for mortgage rates), at 5.13%, are at their highest since 2008.

It’s “a rubbish time” to be having a political crisis, said Daire MacFadden in the Financial Times. “Sadly, that’s precisely what we have.” Any leadership challenge is “all but certain to herald a move to the left and potentially an increase in government borrowing”. To some extent, the gilt market had already priced this in, but “the risk of some kind of accident here is real”.

It doesn’t help that Andy Burnham – who last year observed that government shouldn’t be “in hock” to the bond market – “keeps talking about bond markets as if they are some sort of entity he can bamboozle with jargon”, said John Stepek on Bloomberg. The view from his camp seems to be that renationalising various sectors of the economy will inherently make them more productive – so gilt markets “will be happy to fund the borrowing”. That’s a somewhat “courageous” assumption.

‘Bond vigilantes’ on the rise

“It seems like the only supporters that Keir Starmer has left are the so-called bond vigilantes,” said Robin Wigglesworth in the FT. As they point out, higher borrowing costs are already chipping away at the chancellor’s £24 billion of fiscal headroom, which forecasts suggest could halve. But for how long “can the gilt market act as the UK’s political police”?

Among Starmer’s rivals, Burnham is perceived by traders as the biggest threat and Wes Streeting as the least risky. We must hope he prevails and persuades investors to lend at “a lower premium” to Britain, said Adam Smith in The Telegraph.

The “intriguing paradox” of Labour politics is that the leader most distrusted by the Left may ultimately be the “most capable of financing the expansive social-democratic state that they all crave”.

Wes Streeting, who quit as health secretary yesterday, has endorsed Andy Burnham as having the “best chance of winning” the Makerfield by-election. That fact should “override factional advantage or propping up one person”, Streeting said on X.

Pending approval from Labour’s ruling National Executive Committee, Burnham is set to stand in the northwest constituency, providing him with the chance to return to Parliament and challenge for the party leadership.

But with rising support for Reform UK in the region, and Labour plummeting in the polls, this will not be easy. How this by-election plays out “could decide the future direction of the country”, said the Manchester Evening News.

What did the commentators say?

Burnham contesting a seat vacated by Josh Simons, former chair of the Labour Together think tank, was “not high on my bingo card for this year”, said Ben Walker in The New Statesman. “Yet the logic behind the move is clear.” It is clearly “a pitch for prime minister”.

But Burnham’s return to Westminster is a “difficult proposition”, if the recent by-election in Gorton and Denton is anything to go by. “Yet, to state the obvious, this would be no ordinary by-election.” Makerfield is a “very different” constituency, and though it is only a “railway line away from Gorton, politically and culturally it is another world entirely”.

Taking into account Burnham’s popularity having been mayor of Greater Manchester since 2017, and exit-poll data from the Gorton and Denton contest, Britain Predicts forecasts a Labour hold, but “only narrowly”, by three points ahead of Reform. Whatever the result, the Makerfield by-election could be “one of the most totemic and decisive” in modern British history.

This is a “high-stakes gamble for everyone involved”, said Tim Shipman in The Spectator. “But then, in Labour politics right now, everything is.” The Makerfield seat is far from safe, despite being held by Labour since it was created in 1983. Simons won with a “majority of only around 6,000 over Reform” in 2024.

Nigel Farage’s party will contest the seat “with all guns blazing” and would be wise to select a “hyper local” ex-Labour supporter to stand, depicting Burnham as a “carpetbagger” who “takes your vote for granted”. With Keir Starmer unlikely to block Burnham standing, as he did in Gorton and Denton, the PM’s position is now “somewhat in the hands of Farage”.

A lot rests on Burnham’s “personal popularity” to get him over the line, said Ollie Corfe in The Telegraph. A YouGov poll this month shows his +4% net favourability score as the only positive rating of any senior Westminster politician (Starmer -46%, Angela Rayner -33% and Streeting -28%).

He will have to combat the disintegrating “Red Wall” in the northwest, where Labour has just lost 372 councillors, while Reform gained more than 400. Neighbouring St Helens saw one of the “most dramatic results” in the entire local elections, with Reform winning 71% of all seats.

The path to Westminster is a “route paved with thorns” that might yet end with the mayor of Greater Manchester’s “hopes in tatters”, said Stephen Bush in the Financial Times. And for Labour, the “stakes could not be higher”.

If Burnham does win, his reputation as a slayer of Reform would “only be enhanced”, and “his march to the leadership he has coveted for so long would then surely be unstoppable”. But if he loses to a Reform candidate, the public will question whether any Labour candidate can win. “Burnham’s defeat would secure Starmer as prime minister: but it could well confirm that he is on course to be Labour’s last prime minister.”

What next?

For the by-election to go ahead, several processes need to happen, said Jamie Grierson in The Guardian. By convention, the Labour chief whip – currently Jonathan Reynolds – will start the process by “moving the writ”, formally asking Parliament to start the election process. Once the writ has been moved, a by-election must take place between 21 and 27 working days later, and usually held on a Thursday.

This should take “about five to six weeks”, said The Guardian, which means the earliest Burnham could return to Westminster, if he wins, would be “early July”. Once achieved, “he could trigger a leadership contest, which he would be expected to win, potentially unchallenged”.

Andy Burnham might be the bookmakers’ favourite to replace Keir Starmer as Labour leader, despite his lack of a Westminster seat, but he certainly isn’t the bond market’s favourite.

In fact, gilt traders see the Greater Manchester mayor as the “biggest threat” of all the potential candidates, said the Financial Times. He troubled investors last year when he suggested the country should not be “in hock” to the bond market. Six out of 10 fund managers picked Burnham as the candidate that would “trigger the most negative market reaction”.

Burnham has said his comments on the bond market were misinterpreted, but the political project he espouses and the vision he offers for the country’s future – Manchesterism – remains highly divisive. Critics see it as “mostly vibes and boosterism” that “relies on a bottom-up localism” difficult to scale at a national level, said PoliticsHome. Others see it as our potential economic and political saviour.

What did the commentators say?

Manchesterism is a “horrifically overused phrase” about how my city “does things differently”, said Stephen Topping in the Manchester Evening News. But it’s true. Manchesterism is “‘place-based’ rather than party political”. It involves “public services working closer together, and in partnership with both the private sector and community groups, to ensure the benefits of a stronger economy can be felt by more people”.

The Greater Manchester region has become the UK’s fastest growing economy over the past decade, “at more than double the rate of the national average”. Devolution has been critical: the “trailblazer” deal struck in 2023 has allowed Greater Manchester to “take public control of key services” such as the bus network, which has improved living standards and boosted the local economy. Those who have worked closely with Burnham believe Manchesterism “could work in other parts of the UK”, though it would pose “a radical departure from the UK’s largely centralised economy”.

Burnham’s programme has begun “delivering affordability and economic dynamism” by “regaining public control” of essential services, said Mathew Lawrence, director of progressive think tank Common Wealth, in The New Statesman.

Energy, water, housing, transport and care are “domains of inelastic demand” and “existential need”. So market governance of the supply side “produces rent extraction” and underinvestment. The public “pays twice: through higher bills” and taxes to fund support. But public control of essentials eliminates the privatisation premium. “Rebuilding public provision is not the alternative to fiscal prudence. It is fiscal prudence.”

Manchesterism might be the “buzzword of the day”, but it’s simply people projecting their “pipe dreams” on to Burnham’s “blank canvas of soft-left localism”, said Daniel Johnson in The Telegraph.

“The irony is that 19th-century Manchesterism was more or less the opposite of what the Labour Party now thinks it means.” Manchester was “both the laboratory and the showcase of the Industrial Revolution”, the “citadel of free trade”. It had nothing to do with Burnham’s “municipal socialism”. His proposed solution to Britain’s economic woes is “a muddled melange of municipal meddling, including tax hikes and more borrowing”. What Britain needs is the 19th-century version, which Burnham doesn’t understand.

The vision of Manchesterism Burnham outlined in January is, in practice, an industrial strategy – and there is “nothing new about those”, said Christopher Snowdon in The Critic. Economists have long criticised them for “misallocating resources, crowding out private investment, picking losers, and forcing taxpayers to bail out industries that are only kept on life support for political reasons”. How, exactly, can Manchesterism “stop us being in hock to the bond markets” when Manchester City Council is “one of the most indebted in the country”.

What next?

Burnham is planning to reassure the bond market that his possible election to Labour leader would “not trigger a financial meltdown”, said The Telegraph. Sources say he is planning to endorse a pamphlet outlining a framework for Manchesterism, setting out how it could be rolled out across the UK and “the wider economic theory behind his ideas”.

But the uncertain national landscape, in which voters are moving both further left and further right, could make the success of Manchesterism “a challenge for anybody”, Sarah Longlands, chief executive of the Manchester-based Centre for Local Economic Strategies, told Manchester Evening News.

Manchesterism is still in its early stages, yet for all the benefits devolution has brought, Greater Manchester is still “a tale of two cities”, with a great income and opportunities divide exacerbated by the cost of living crisis. “Growth in Greater Manchester has to be for everybody – otherwise, what’s the point?” Longlands said.

“Labour has gone from its loveless landslide to having no political heartland in the UK to call its own,” said Adam Boulton in The i Paper.

Reform UK has made sweeping gains across England in the local elections, while the SNP is likely to be the largest party in Scotland. Labour has already admitted it is not going to form the next government in Wales.

Keir Starmer has declared he is “not going to walk away and plunge the country into chaos”. However, amid rumours of challenges from former deputy prime minister Angela Rayner, Health Secretary Wes Streeting and Mayor of Greater Manchester Andy Burnham, Labour’s poor performance in the local elections could prove the tipping point for the PM.

What did the commentators say?

“Kingmaker” Ed Miliband has reportedly privately suggested to Starmer he should set out a “timeline for his departure” after the results, said Steven Swinford in The Times. Though the former party leader is “supportive” of Starmer, he is worried that Labour may “descend into a bitter and damaging leadership contest”.

Both Rayner and Streeting are thought to have the support of the 81 Labour MPs needed to “trigger a contest”. Rayner reportedly does not see the ongoing HMRC investigation into her tax affairs as a “barrier to putting herself forward”. Burnham has also “emerged as the preferred candidate of powerbrokers on Labour’s soft left”. They believe an “orderly transition to his leadership over a period of months is the only way to avert a bloody civil war”, with reports of a backbench MP standing down to accommodate his return to Westminster.

Indeed, it may appear an “obvious conclusion” – that changing the leader would make its problems “go away”, said Boulton. “Obvious but wrong.” Inexperienced Labour MPs – “more than half” of whom were first elected in 2024 – had “supped full on the bloodshed” of five axed Conservative leaders before the general election. But they “failed to notice that such a butcher’s bill did not ultimately improve the Tories’ fortunes”. The reality is they have a “poor leader who has led them into an electoral catastrophe, but without him, things could always get worse”.

Starmer may be on the end of one of the party’s “worst set of election results in history”, but he may “take solace” in his potential challengers also “facing heavy losses in their own patch”, said Kiran Stacey in The Guardian. Labour lost control of Tameside in Greater Manchester, Rayner’s local council, and “struggled” across the northwest, impacting Burnham. Experts also expect Labour to “do badly” in Streeting’s home council of Redbridge in northeast London.

Labour MPs will have a “terrible sinking feeling”, said political strategist James Frayne in The Telegraph. They won’t know which way to turn, but the “great risk” for them is “looking like they’re part of the problem”. Staying silent implies a weakened party is becoming more divided, but appearing to “trot” out excuses for Starmer “risks downplaying the prospect of a straightforward Farage majority at the next election. That’s not a risk that anyone with any hope of a future in the Labour Party can take.”

It is “hard to deny” that Starmer’s days are “numbered”, said Simon Walters in The Independent. But the question remains: “how is any replacement going to make things better for Labour?” Starmer “may not set the pulse racing” but he is “decent and honest”, as well as making the right calls over Iran, and “standing up to Donald Trump with courage and quiet dignity”. Until someone raises “convincing solutions” to current issues, those who are “indulging in a petty blame game” in Westminster “should be careful what they wish for”.

What next?

Votes were still being counted, but the Labour “post-mortem” had already begun, said Ethan Croft in The New Statesman. Amid the “necessary evasions and sugar-coating of damage control”, there are “hard-headed calculations” about which direction the party should turn. Over the next few days expect everyone on the Labour left and right to use the results to “validate what they already believed”, and to “argue for policies and strategies they were already advocating for the party’s future”.

Those on Labour’s right are “confident” the results “vindicate” Shabana Mahmood’s “hardline” stance on immigration, believing the party must do more to “neutralise” Reform on Labour’s own terms. Those on the left of the party, however, think this is “precisely the consequence of pursuing that brand of politics”, and is also why they are being “walloped” by the Greens.

Andy Burnham has made no secret of his desire to one day lead the Labour Party. The mayor of Greater Manchester has twice run for the leadership – in 2010 and 2015 – and just two years ago reaffirmed his aspirations for the top job, telling The Telegraph: “If the party thinks well maybe it is your time, I wouldn’t turn away from that.”

That naked ambition “has always made him an anxiety-inducing blot on the landscape for the incumbent leader”, said The Guardian, “but the road to No. 10 is a very difficult one”. Burnham may have a vision for his path to the leadership – “but he doesn’t have complete control of how to make it a reality”.

What did the commentators say?

After a disastrous two weeks, “Starmer’s premiership is on its knees”, said Kitty Donaldson in The i Paper, “with his own internal critics now publicly putting a timeline on how long it can last”. Some are warning he could be ousted after May’s elections.

The “despondent mood among his MPs isn’t limited to his left-wing critics”. Mainstream figures and grassroots Labourites are “questioning whether the chaotic departures of Angela Rayner and Peter Mandelson are fundamental markers of Starmer’s political judgement, his vision for the country, and even his basic competence”.

By contrast, Burnham has been consistently chosen as the next PM in polls of Labour members and his appeal extends to voters who backed Labour in the last general election. Last week, the man dubbed “the King in the North” by supporters launched a new soft-left campaign group, Mainstream, which “many expect to become a Trojan horse for a leadership bid”, said The Telegraph.

Backing calls for wealth taxes, nationalising utility companies and ending the two-child benefit cap, Burnham “would want to lead a government with a strikingly different tone – more sympathetic to dissent, more open to the Liberal Democrats and to the Green Party – a soft-left administration with strong appeal to many Labour members”, that would also be “better at combating Reform”, said The New Statesman’s Andrew Marr.

He has already called for a “reset” at the Labour conference later this month, and No. 10 is “braced for Burnham to pop up in Liverpool as a rallying point for a change of direction”, said Donaldson.

What next?

Under current rules, 20% of the parliamentary party (80 MPs) would be required to challenge Starmer by nominating an alternative candidate, “and it’s far from agreed who that could be”, said Politico.

Burnham faces an even greater obstacle than most candidates as he would first need to fight and win a parliamentary seat in order to stand in any future leadership race. One obvious option would be Gorton and Denton in south Manchester, where suspended Labour MP Andrew Gwynne has applied to retire on medical grounds. But that seat, along with many in and around Manchester, is vulnerable to Reform, according to the latest forecast from Election Maps UK.

“The harsh reality is that there is no realistic route for him to become leader” in the near future and attempting to do so could “hand Farage a huge opportunity in a genuine showdown”, said The Independent. “Even if the Labour Party needs saving, trying to bring back Andy Burnham would be a gamble too far.”

1. Hear me out – Andy Burnham is Labour’s Boris Johnson

Marie le Conte in The Independent

on a leadership contender

“What or who comes to mind when you think of Andy Burnham? Do you think of the north of England? ‘Twenty-four hours to save the NHS’? Biscuits and gravy, perhaps? How about Boris Johnson?” writes Marie Le Conte in The Independent. It seems possible that Burnham, a former Labour frontbencher turned “King in the North” as Manchester’s metro mayor, could “do a Boris and triumphantly return to Westminster to save his party from ruin”, suggests Le Conte. Indeed, “the mere fact that it is a possibility points to quite a fundamental shift in British politics”, she writes. Seeing as “politicians old and new have the possibility now to run as metro mayors in England, parliament no longer has to be the place in which future leaders are made”. She concludes: “Andy Burnham is not Boris Johnson, but he clearly hopes to have a similar journey. If he manages it, others may well decide to try and follow suit. Can Westminster handle it?”

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2. Must I take personal responsibility for you?

Hugo Rifkind in The Times

on mask wearing

“When we speak of personal responsibility in the age of Covid, we are actually talking about two very different things,” writes Hugo Rifkind in The Times. “The first is responsibility for ourselves, and the second is for everybody else. Remarkably, quite a lot of people seem yet to comprehend the distinction,” he continues. “Your hardcore mask refusers may choose to style themselves as akin to 1930s German Jews refusing to wear yellow stars, but for many of us they have actually more closely resembled those American libertarian gun nuts who make a point of wearing an assault rifle strapped across their chests at the Walmart cheese counter,” he writes. “As in, it is not, and has never been, only about you.”

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3. You really need to quit Twitter

Caitlin Flanagan in The Atlantic

on a modern addiction

“I know I’m an addict because Twitter hacked itself so deep into my circuitry that it interrupted the very formation of my thoughts,” writes Caitlin Flanagan in The Atlantic. “Every thought, every experience, seems to be reducible to this haiku,” she writes, “destroying my ability for private thought, sucking up all my talent and wit. Put it out there, post it, see how it does,” she continues. Indeed, “the simplest definition of an addiction is a habit that you can’t quit, even though it poses obvious danger. How many people have lost their jobs over ill-considered tweets? How can a wry observation, unexamined and fired off during an adrenaline high, possibly be worth the risk? It’s madness.” A month into a self-imposed Twitter ban it’s clear how “pathetically simple” human psychology is to manipulate. “Once you’re hooked, the parasite becomes your master, and it changes the way you think. Even now, I’m dopesick, dying to go back.”

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4. Priti Patel rattles the handcuffs – but the Tories have lost control of law and order

Polly Toynbee in The Guardian

on British justice

“Justice is grinding to a halt. The handcuff-rattling home secretary, Priti Patel, likes announcing draconian new sentences – but without adequate police, prisons and, above all, law courts to hear cases, her bombast is empty,” writes Polly Toynbee in The Guardian. “Court delays deny justice to victims, to witnesses fast forgetting what they saw, to the guilty who should face consequences quickly, to the innocent wrongly locked up on remand or with a cloud hanging over them,” and the pandemic has simply “worsened an existing crisis: there was a 37,000 crown court backlog in 2019”, writes Toynbee. “All this makes law-and-order Tories vulnerable, with concerns about crime raised in recent byelections. All civilisation rests on trust in the law,” she continues. “It’s time for Labour to abandon squeamishness about anything that smacks of tough-talk crowd-pleasing: this government’s dereliction of duty undermines the bedrock assumptions of any decent society.”

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5. The terrifying truth is that millions do not want lockdown ever to end

Sherelle Jacobs in The Telegraph

on a new culture war

“[A] depressing truth looms over Britain: many people do not seem to want restrictions to end,” writes Sherelle Jacobs in The Telegraph. “Millions have become attached to the gilded trappings of lockdown, from furlough to flexi-home working. With our every movement micromanaged by one metre signage and one-way arrows, our instincts for independent self-direction have shrivelled. And after nearly 18 months of relentless – and irresponsible – anti-Covid messaging, terror of the virus is still everywhere.” So, says Jacobs, “a nasty culture war is brewing, a modern twist on the old feud between positive and negative liberty”. And face masks look like they will provide the ammunition. “What should have been a matter for personal choice, based on mutual respect, is gearing up to become a sort of tribal signal,” she writes. “We are starting to see now that commitment to the value of individual freedom, far from being robust as a coil spring, is fragile as glass.”

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