UK PM Resigns: What Business Wants Now

**Bisi Adebayo** (0:01)
The man who promised to reboot Britain's economy is stepping down. It's World Business Express from the BBC World Service. I am Bisi Adebayo. We'll look at what Keir Starmer's resignation means for business confidence, and remember Alan Greenspan, the economist who helped shape the modern American economy and steer the Federal Reserve through nearly two decades of change.

**Keir Starmer** (0:31)
Every decision I've taken has been about putting the country I love first. That is why I will resign as leader of the Labour Party.

**Bisi Adebayo** (0:42)
That's Keir Starmer announcing he's stepping down as Britain's Prime Minister earlier on Monday after less than two years in office. His resignation opens the door to a Labour leadership contest at a time when the government is facing tough questions over growth and public finances. So how concerned will businesses and investors be about another change at the top? Rain Newton-Smith is the Director General of the Confederation of British Industry.

**Rain Newton-Smith** (1:08)
I think it's always a moment of sadness when a Prime Minister announces his resignation. I think this Prime Minister has played a humongous important role on the international stage, I think, for the UK.
He's made sure that we are in a reset with the European Union. He's ensured that we've signed a trade deal with India. And I think his international legacy is very strong. And I think at this moment, the business community thanks him for his leadership. We now know that we will see a new Prime Minister. And I think what business wants to see from that is the next Prime Minister is very much focused on how we deliver economic growth in the UK to drive higher living standards.

**Bisi Adebayo** (1:50)
And let's talk about the business community that you touched on there. I'm sure you've been having lots of conversations since this news broke a few hours ago. What exactly is their concern? Are they talking about the fact that this could create a fresh period of uncertainty for the economy?

**Rain Newton-Smith** (2:08)
Well, I think what they want to see, and the Prime Minister announced he would be absolutely committed to this, is a smooth transition to new leadership for the UK. There's so many decisions that need to be taken.
We're still waiting for a defense investment plan, which is really important for the UK's security. We need to make decisions about how we reduce the trade barriers with the European Union. We should have a UK-EU summit next month. That might get delayed a bit, but I think the importance of a close relationship with the EU remains. More broadly, there are so many decisions that need to be taken to make it easy for businesses to invest and create jobs in the UK. And the rest of the world won't stand still as we go through that transition. So I think business will stand ready to help whoever is the next Prime Minister. But there's not a moment to waste. There's so much we need to deliver.

**Bisi Adebayo** (3:01)
What would you like to hear from whoever succeeds, Keir Starmer?

**Rain Newton-Smith** (3:05)
Well I think what we would like to see is a clear commitment to economic growth being the core to the strategy of how we raise living standards around the UK. That means listening to business leaders. It means making sure that the UK economy is competitive on a global stage. It means continuing the ambition on some of the trade deals that the UK has signed, but fundamentally backing business to invest in the UK.
It's only by businesses investing, creating jobs, that we see the higher living standards, I think, that people really want to see in their local communities here in the UK.

**Bisi Adebayo** (3:43)
Well, let's bring in Jane Sydenham, Investment Director, Ratbones Investments Management. Jane, this is indeed a delicate time for the UK economy. But from your end, what are you hearing about investors' reactions?

**Rain Newton-Smith** (3:56)
Well, pretty positive, really. I mean, the UK stock market is positive, the bond market is positive and sterling is strengthened. But I think it's probably important to look through and actually say most of that is because of the likelihood of good negotiations to bring the war to an end in the Middle East. So I think it's less to do with the domestic political situation.

**Bisi Adebayo** (4:18)
In other news now, we've learned that Washington is suspending sanctions on Iranian oil until late August. So perhaps is that why the markets are feeling more relaxed about supply?

**Rain Newton-Smith** (4:31)
I think so. I mean, the first round of negotiations seem to end with encouraging progress according to Qatar and Pakistan and Iran's foreign minister. So there's been major progress towards ending the conflict in Lebanon, which has been the real sticking point. So I think markets are hoping that this time we'll get a deal in 60 days time.