Europe midday: Shares trim gains as Starmer rival reportedly set to quit

13th May 2026 11:52

(Sharecast News) - European shares trimmed gains on Wednesday as investors eyed US President Donald Trump's visit to China and the UK's leadership saga dragged on as a main challenger to Prime Minister Keir Starmer was reportedly set to resign.

The pan-regional Stoxx 600 was up 0.37% to 608 by 1157 BST with all major bourses higher.

Starmer held a 16-minute meeting in the morning with Health Secretary Wes Streeting - widely seen as his main rival in any challenge for the leadership - a day after he refused to stand down despite the resignation of four ministers and growing calls for him to resign.

Speculation soon circulated that Streeting was set to resign, with UK media quoting a source close to the minister that he was planning to resign on Thursday and launch a leadership bid. The news sent UK bond yields higher as traders feared higher spending by any successor to Starmer.

Labour also faces the looming threat of the hard right Reform group - led by Nigel Farage - which made large gains in last week's local council elections.

"The name Farage resonates in markets as a clearer path toward looser fiscal policy, higher spending and larger deficits, just as investors are already worried about Britain's debt and inflation outlook. That combination is pushing investors to demand higher compensation to hold UK government debt sending the UK 10-year gilt yield back above 5%," said Swissquote analyst Ipek Ozkardeskaya.

"That's the highest level since 1998. The higher the borrowing costs, the less the government can borrow, and the impact on growth would be negative."

Meanwhile Trump is set to arrive in Beijing to meet his fellow autocrat Xi Jinping where trade, Taiwan and the Iran war are expected to be the main topics of talks.

In a busy day of European corporate updates and quarterly earnings reports shares in UK housebuilder Vistry slumped as it issued a profit warning and paused share buybacks.

Adecco shares were also sharply lower after the recruiter posted first-quarter results, while Merck shares surged also after results and a lift in guidance.

Reporting by Frank Prenesti for Sharecast.com