Keir Starmer’s chief of staff, Morgan McSweeney, resigned on Sunday, becoming the first major casualty of the controversy surrounding the appointment of Peter Mandelson as the UK’s ambassador to Washington — a crisis that is now threatening the prime minister himself. McSweeney’s departure is a major setback for Starmer, who had publicly expressed confidence in him just days earlier, calling him an indispensable member of his team. As the chief strategist behind Labour’s landslide victory in the 2024 election and Starmer’s closest adviser, McSweeney’s exit leaves the prime minister politically exposed, particularly as discontent grows among Labour MPs demanding change at the top.

The fallout intensified after McSweeney resigned, with influential Labour-aligned groups arguing that accountability should extend beyond the chief of staff. Mainstream, a left-leaning Labour network, said everyone involved in Mandelson’s appointment must be held responsible, while Compass went further, suggesting that Labour would eventually need new leadership. Opposition parties were quick to target Starmer directly. Liberal Democrat deputy leader Daisy Cooper said responsibility ultimately rested with the prime minister, while Conservative leader Kemi Badenoch urged him to own his decisions. Reform UK leader Nigel Farage predicted Starmer could soon follow McSweeney out of office.

Financial markets are expected to closely watch developments, as investors have previously reacted negatively to speculation about Starmer or Chancellor Rachel Reeves stepping down, fearing a shift away from fiscal discipline. Even before the resignation, senior minister Pat McFadden warned that frequent leadership changes risk economic and political instability. McSweeney’s resignation marks the second time in just 19 months that Starmer has lost a chief of staff, highlighting ongoing turbulence within Labour. Jill Cuthbertson and Vidhya Alakeson, both previously deputies, are set to take over jointly.

With Labour’s poll numbers slumping, Starmer’s inner circle is now weakened as party members quietly discuss potential successors, including Health Secretary Wes Streeting and former deputy prime minister Angela Rayner. McSweeney accepted responsibility for advising Starmer to appoint Mandelson, calling the decision a mistake that damaged public trust. Starmer, meanwhile, praised McSweeney’s role in transforming the party and leading it to electoral victory.

The crisis was triggered by revelations that Mandelson had allegedly shared sensitive government information with Jeffrey Epstein while serving in a previous Labour government. Further disclosures, including newly released emails, raised fresh doubts about Starmer’s judgment in appointing Mandelson despite his controversial past. Starmer admitted he had been misled about the nature of Mandelson’s relationship with Epstein and publicly apologized for believing his assurances. Mandelson was dismissed as envoy shortly after further evidence emerged, and the government later agreed to allow Parliament’s Intelligence and Security Committee to oversee the release of vetting documents, though some material may be withheld due to an ongoing police investigation.

With those documents still unpublished and McSweeney gone, Starmer now faces mounting pressure without his most trusted political shield. As Labour braces for key by-elections and local elections where heavy losses are expected, the prime minister must navigate a deepening crisis — and his own political survival — without the architect of the party’s 2024 success.

Disclaimer: This image is taken from Bloomberg.