Rain Newton-Smith, CBI Chief Executive, said:

“Prime Minister Sir Keir Starmer championed UK business at home and abroad and on both a personal and professional note, we are grateful for his service and all he has delivered for the UK.

“His leadership on the international stage is truly admirable, and we are grateful for all he has done to ensure the UK was open to the world. His steadfastness in doing the best for the UK with integrity and sincerity was plain to see in person.

“At a time when households and businesses remain under intense pressure from high costs, making economic growth the government’s central mission was the right call.

“With geopolitical tensions high, the country now needs stability, confidence and a clear path to growth. The UK's economic challenges will not disappear with a change of prime minister. The economy won’t fix itself while politicians look inwards. And you cannot tackle the cost-of-living without addressing the cost of doing business.

“There are big decisions that need to be taken, whether that’s on the Defence Investment Plan, infrastructure projects, energy price caps or the UK-EU reset. These are long‑term commitments and businesses need to know that there is not going to be further drift or delay. Business will want their voice to be heard and for the needs of our economy, the ability to invest and create jobs throughout the UK, to be at the forefront of any decisions. It’s a competitive game to capture global investment and one in which the UK needs to stay ahead.

“We look forward to working with the government on the transition and with the next prime minister, who must move quickly to reassure businesses and investors, protect living standards, and set out a credible, deliverable plan for growth.”

Keith Griffiths, founder and CEO of The Entrepreneur Festival said:

“With Keir Starmer gone, Labour faces a defining choice: double down on wealth redistribution or put wealth creation back at the centre of its mission. The UK's productivity crisis won't be solved by managing decline - growth is the precondition for better public services, higher living standards and economic opportunity.

"Andy Burnham has argued for more power to be devolved to regions, but devolution alone isn't a growth strategy. What the UK needs now is a government that understands how businesses actually grow – from startup and scale-up through innovation, investment and exit.

"Entrepreneurs create jobs, drive productivity and generate the wealth that funds everything else, yet too often policy is designed around political cycles rather than business realities.

"The next generation of economic leadership needs to spend less time talking about entrepreneurs and more time listening to them. The founders who have built, scaled and exited businesses understand where the opportunities for growth really are. If Labour wants to rebuild the economy, it must make supporting entrepreneurship a national priority, not an afterthought."

Andrew Prosser, Head of Investments at InvestEngine, said:

“After weeks of speculation, Prime Minister Keir Starmer has confirmed his resignation triggering a Labour leadership contest this summer. For long-term investors, this news is less about who leads Labour and more about what impact this news will have on markets, and how long this will go on for.

“Prolonged uncertainty tends to keep bond markets on edge, and we’ve already seen that reflected in fluctuations in gilt yields. When Starmer initially faced calls to resign, gilt yields spiked, before falling back as he vowed to fight on. Then immediately after news broke of Andy Burnham’s win, we saw another slight rise, from 4.75% to 4.85%. However, this reaction was smaller than some may have expected – potentially because his win was so widely assumed.

“Higher gilt yields increase the Government’s borrowing costs and can also push up borrowing costs for mortgages and loans.

“Political instability - such as a change in prime minister - can create both risks and opportunities for investors but those who want to grow their money over the long term should not be worried. This upheaval may move markets in the short term, but history has shown markets always recover, and often quicker than expected.

“The investors who tend to come out ahead of periods like this are the ones who stay diversified and stay invested. Our advice is that long-term investors should avoid making knee-jerk decisions, ignore the noise and sit on their hands. Time in the market, as ever, matters more than timing the market.”