Confidence in the UK economy has taken a nosedive this month, with business leaders growing increasingly pessimistic as speculation mounts about a potential tax-raising Budget. The latest survey reveals a three-point drop in corporate confidence, down to 47pc—the lowest level seen in three months.
The Labour Party, led by Sir Keir Starmer, is experiencing growing unease within corporate circles, following a period of warmer relations. But as the threat of higher taxes looms large, doubts about Labour’s business-friendly stance are intensifying.
Amid this uncertainty, focus has also turned to the broader political landscape, with the possibility of significant shifts in the Labour leadership as the next general election draws near. Although speculation about a shake-up at the top may seem premature, Labour technically has until 27th September 2025 to hold the next election—a fact many overlook. However, most political insiders deem such a delay highly improbable, given the challenges it would present.
In particular, a delayed election would require a half-Senate vote in order to be feasible, but that scenario remains far-fetched. Yet, the extended timeline does offer the Labour Party an opportunity for an internal overhaul if Prime Minister Anthony Albanese’s position becomes untenable—a prospect some Labour insiders are beginning to entertain.
Albanese Under Pressure Amidst Poor Polling
Rumours of dissent within Labour’s ranks are gaining traction as former powerbrokers suggest Albanese’s leadership could be under siege. With leaks and internal friction becoming more frequent, questions about his ability to steer the party through turbulent waters are mounting.
Polls reflect a tightening race, with two consecutive Freshwater surveys showing the Coalition now leading Labour. Albanese’s personal approval ratings have taken a dive, and on major issues like cost of living—a central concern for Australians—voters are turning to the Coalition as the preferred party to address these challenges.
Newspoll data adds further fuel to the fire, revealing that Labour’s primary vote is collapsing in key states like New South Wales and Victoria—traditional strongholds that could be decisive in the next election. Compounding Labour’s woes, the party is struggling to gain traction in Queensland, where the Coalition holds a significant share of seats.
These trends are causing jitters within Labour, particularly among those who see Treasurer Jim Chalmers as a viable alternative to Albanese. Cameron Milner, former chief of staff to Bill Shorten, recently suggested that a leadership shift could be on the cards. He pointed to a recent leak regarding potential changes to negative gearing as an orchestrated attempt to discredit Albanese while elevating Chalmers, who was attending high-profile meetings in China at the time.
“Chalmers looked like a leader on the world stage, while back home, Albanese just looked like a liar,” Milner wrote in a scathing column, reflecting growing discontent with the prime minister’s handling of key issues.
Leadership Change Unlikely Before Election, But Pressure Mounts
Despite these rumblings, Labour is unlikely to change leaders before the next election, even with the possibility of delaying the vote until late 2025. However, if Labour struggles at the polls and is forced to form a minority government, Albanese’s tenure may be short-lived.
Labour’s leadership rules, revised after the chaotic Rudd-Gillard years, make it harder to depose a sitting leader. Under these rules, half the decision-making power lies with party members, who tend to favour Albanese’s left-leaning faction, while the other half lies with MPs and Senators. This procedural process, designed to avoid damaging leadership spills, would take months to complete, likely sparing Albanese from a leadership challenge before the election.
Nevertheless, a poor showing at the polls could change everything. If Labour loses seats or barely scrapes through with a minority government, internal dissatisfaction could explode, with both members and MPs questioning whether Albanese is the right person to lead the party forward.
Election Timing Critical as Labour Hopes for Rate Cuts
Albanese’s political fortunes will depend heavily on how the economy performs in the coming months. Labour insiders suggest that he may delay the election until early next year in the hope that interest rates will be cut after the Reserve Bank reconvenes in February. By doing so, the government could avoid having to deliver another Budget before voters head to the polls.
For now, the prime minister’s focus is on turning the tide in Queensland, where the state’s Labour government is facing an uphill battle in the upcoming state election on 26th October. Federal Labour hopes that by waiting until after the state election, they can win back some support from disillusioned Queensland voters.
With everything on the line, Albanese will need to navigate both internal pressures and external economic challenges if he hopes to lead Labour to victory in the next general election. Whether he can hold off the political sharks circling his leadership remains to be seen.
