Surprise GDP figures ‘too little, too late’ for Starmer- MARKETS LIVE

Updated: 03:31 EDT, 14 May 2026

The economy is holding up better than expected during the Middle East conflict, as this morning’s GDP figures showed growth of 0.6 per cent in the first quarter.

The resilience in the economy despite the deadlock in the Strait of Hormuz will be of little relief to the Prime Minister, who, after days of speculation, is facing his biggest challenge yet.

The FTSE 100 opened 20 points higher, before trading flat within minutes at 10,326. Bond markets are relatively calm with the 10-year gilt yield slipping 3 basis points, while 30-years are trading down 2 basis points at 5.72 per cent.

After some relative respite during the King’s Speech on Wednesday, health secretary Wes Streeting is widely expected to resign and mount a leadership challenge. While Andy Burnham could also announce his plan to return to Westminster today.

And to add salt to the wound, Angela Rayner has been cleared by HMRC over her tax affairs, which could pave the way for her own challenge.

While GDP figures showed the UK economy grew by 0.3 per cent in March and 0.6 per cent in the first quarter, analysts say this risks masking the growing risk for markets and interest rates.

Markets are also coming under pressure from the prolonged conflict in the Middle East. Oil has settled at $105 a barrel after the International Energy Agency warned that oil supplies had plunged at a record pace in April on Wednesday.

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Chancellor calls for calm

Rachel Reeves has warned that a leadership challenge will crash the economy, following this morning’s GDP figures.

The Chancellor said Labour MPs had an ‘important decision to make’ and that further turmoil risks ‘plunging the country into chaos at a time when our plan to grow the economy is starting to bear fruit’.

‘Now is not the time to put our economic stability at risk. To do so would leave families and business worse off. Instead, this Government is getting on with the job of building an economy that is stronger, more resilient, and prepared for the future,’ she said.

Starmer under pressure

This morning’s GDP figures offered some brief respite from the ongoing political drama of the day.

However, the growth is unlikely to be sustained through the year, as the prolonged closure of the Strait of Hormuz keeps energy prices elevated. Economists also warn that UK growth figures have come in much stronger in the first quarter since 2022.

‘The more upbeat UK performance is also likely to be too little, too late for Prime Minister Sir Keir Starmer,’ says Susannah Streeter, chief investment strategist at Wealth Club.

‘Like the economy, he has been languishing under a lacklustre image, even though his premiership has brought stability to the UK after years of volatility, helping fuel a rebound in the FTSE 100.’

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