Stammer is caught in a political squeeze between the left and right factions within the party, while the pound is under pressure and British bonds are fluctuating.

Efforts by British Prime Minister Keir Starmer to quell potential challenges within his party have hit a new snag, as allies of his main rival within the Labour Party have indicated they are prepared to vie for the position of Prime Minister. Starmer's former deputy, Angela Rayner, announced on Thursday that she is preparing to contest the leadership of the ruling Labour Party following a tax investigation that cleared her name. Supporters of the Prime Minister had been expecting Health Secretary Wes Streeting to resign from the cabinet and mount a challenge. The disastrous results of local elections last week have sparked internal questioning within the Labour Party leadership - many Labour MPs believe that Starmer lacks an effective plan to deal with populist opponents such as Nigel Farage's Reform UK and the Green Party. Despite Starmer's refusal to discuss the "leadership issue" at a high-risk cabinet meeting on Tuesday and his vow to continue the fight, more than a fifth of Labour MPs (including at least two cabinet ministers) have publicly urged him to step down. Two challengers emerge: Rayner and Streeting Starmer's former deputy, Angela Rayner, signaled on Thursday that she is preparing to contest the leadership of the Labour Party after a tax investigation cleared her of wrongdoing. Rayner's spokesperson stated that HM Revenue and Customs had found no negligence or intentional wrongdoing on her part, and she had paid 40,000 (approximately $54,000) in unpaid stamp duty without being fined. Rayner expressed her desire to "play a role" and urged Starmer to "reflect" on whether he should step aside. However, she emphasized to ITV that she would not initiate a challenge to the Prime Minister and would not make any "deals" with opponents like Burnham. Allies of Wes Streeting, the Health Secretary from the right wing of the Labour Party, revealed on Wednesday that Streeting may resign from the cabinet this week and launch a bid to replace Starmer. This move had been expected by supporters of the Prime Minister. However, Starmer himself has stated that he will vigorously defend his position, putting pressure on Streeting - who needs to prove that he can secure the 81 nominations from MPs required to trigger an internal party contest. Some supporters are concerned that he may lose to the incumbent Prime Minister in a direct confrontation. Market reaction: Pound edges lower, bond yields retreat from 18-year highs Political uncertainty has spilled over into financial markets. After news of Rayner's intentions emerged, the pound exchange rate slightly declined before stabilizing at 1 pound to 1.3521 dollars. Meanwhile, investor demands for higher yields on UK government bonds continued to rise on concerns that political turmoil could undermine fiscal discipline maintained by the Starmer government. The yield on 10-year UK government bonds retreated from the 18-year highs reached earlier, dropping 3 basis points to 5.04%. This trend was in line with the global government bond markets. In addition, attention should be paid to the UK's economic fundamentals and warnings from the Chancellor of the Exchequer. The latest data shows that UK gross domestic product grew by 0.6% in the first quarter, accelerating significantly from 0.2% in the previous three months to achieve the fastest expansion in a year. However, the UK still faces multiple pressures such as slow growth, weak employment, and rising inflation due to the conflict in Iran. Chancellor Rachel Reeves warned on Thursday morning that economic stability should not be jeopardized by leadership struggles that "plunge the country into chaos." She stressed that fiscal discipline must not be compromised. Leadership contest mechanism: A potential tug-of-war lasting months Any leadership contest could take months to unfold. According to Labour Party rules, candidates need to: 1. secure enough nominations from Labour MPs; 2. win a certain level of support from local Labour branches or affiliated organizations; 3. progress to the final vote by paid-up party members (currently less than 250,000). Starmer's longstanding issues - record-low approval ratings, controversy over the appointment of Peter Mandelson as the ambassador to the US - have been further amplified in this context. Rayner's return puts pressure on Andy Burnham, the Mayor of Greater Manchester. Burnham would need to find a vacant seat and gain Labour approval - a process that would take months even if Starmer cooperated. While allies of Burnham claim that there are MPs willing to step down, several Manchester area MPs have publicly denied this. In the tug-of-war between Burnham and Rayner, Energy Minister Ed Miliband has seen his rankings rise on prediction markets. This veteran, who led the Labour Party for five years and lost to Cameron in 2015, is emerging as the standard-bearer that the Labour Party's "moderate left" may rally behind.