Theresa May to Step Down as U.K. Prime Minister

Mrs. May announced on Friday her intention to leave office after failing repeatedly to win parliamentary backing for the Brexit divorce agreement she negotiated with the bloc.

With little prospect of getting her deal passed three years after the U.K. voted to leave the EU, Mrs. May said the race to find her replacement would formally begin after she quits as head of her Conservative party on June 7. That will take several weeks, and a new prime minister is likely to take over in July.

“It is now clear to me that it is in the best interest of the country for a new prime minister to lead that effort” to complete Brexit, she said during a statement on the steps of 10 Downing Street. Mrs. May, her voice breaking, spoke of her sadness at no longer serving as prime minister and urged lawmakers to compromise over Brexit.

Several of those at the front of the pack to succeed her, including former Foreign Secretary Boris Johnson and former Brexit Secretary Dominic Raab, advocate a more abrupt split with the EU than the one Mrs. May hoped to secure, without a deal if necessary. Mr. Johnson has one attribute that Mrs. May crucially lacked: many party loyalists say they see him as a vote winner.

“To succeed, he or she will have to find consensus in Parliament where I have not,” Mrs. May said of the next leader.

The new prime minister will also inherit Mrs. May’s unpopular deal with the EU and face the bloc’s unwillingness to change it.

European officials said they believe a no-deal exit looks more likely given Mrs. May’s departure, and expect a new prime minister to return to Brussels in a likely futile effort to renegotiate the deal. French President Emmanuel Macron, praising Mrs. May’s “courageous work” on Friday, also said the EU needed a rapid clarification about the U.K.’s plans.

The leadership race will play out over the summer as Conservative lawmakers vote to whittle potential leaders down to two candidates. The party’s 120,000 members then elect their preferred leader.

Conservative members are, on the whole, more in favor of the U.K. leaving with no deal than is the wider pool of Conservative voters—and the electorate as a whole.

Under British convention, the prime minister is the leader of the party that commands a majority in the House of Commons, which the minority Conservatives do because they have the backing of the Democratic Unionist Party from Northern Ireland.

Businesses reacted to the apparent heightened risk of a no-deal Brexit following Mrs. May’s announcement. Adam Marshall, director general of the British Chambers of Commerce, said “A new prime minister must work to avert a messy and disorderly exit from the EU.”

Meanwhile, Jeremy Corbyn, leader of the main opposition Labour Party, said a new leader should call for a general election. But such a step appears unlikely until the Conservative’s current low standing in opinion polls approves markedly.

The pound had been falling against the dollar ahead of the announcement as traders fret about the economic shock of a no-deal Brexit and worry an early election could bring the socialist Labour Party to power.

Investors widely expected Mrs. May’s departure, and the currency moved little in the hours after the announcement, trading at $1.266, still close to its lowest point against the dollar all year.

Mrs. May took over as party leader and prime minister after her predecessor David Cameron resigned following the 2016 referendum decision to leave the EU. She was ultimately trapped between Conservative ministers and lawmakers who wanted an abrupt and total departure from the EU and those who advocated keeping close economic ties with the bloc.

“It is, and will always remain, a matter of deep regret to me that I have not been able to deliver Brexit,” Mrs. May said.

Disenchantment was amplified after she called an election in 2017 that cost the Conservatives their majority in Parliament.

Mrs. May interpreted the Brexit vote as a cry to clamp down on EU immigration. Many in her party saw it differently. A cluster of libertarian Conservative lawmakers who run an association called the European Research Group, wanted the U.K. to make a sharp break with the EU, cut regulation and promote trade deals with the rest of the world. Pro-European Conservatives meanwhile wanted close trading ties with the bloc to bolster the British economy.

Both factions were appalled by the deal Mrs. May hashed out with EU leaders last year to get the U.K. out of the EU. The compromise agreement slackened economic ties with the bloc—creating new obstacles for trade—but still left the U.K. relatively closely bound to the EU.

Despite her initial popularity with the Conservative base, Mrs. May’s time in office quickly turned into a battle of attrition. No British leader in modern times has endured such a sustained revolt from within his or her own party.

A fifth of all British ministers who have quit government since 1979 have done so during Mrs. May’s relatively brief tenure.

In January, her Brexit plan suffered the biggest British parliamentary defeat in living memory. By then her own party had already tried and failed to oust her.

A small cadre of Conservative lawmakers quit to join a new centrist grouping in protest of her handling of Brexit, the sort of defection that is rare in the British political system.

Meanwhile, voters began to abandon the Conservative Party in droves. The ruling party performed badly in local elections earlier this month and was expected to record its lowest ever national vote tally at elections for the European Parliament on Thursday with the one-issue Brexit Party as the main beneficiary.

Mrs. May’s attempt on Tuesday to win over opposition Labour lawmakers by dangling the prospect of second Brexit referendum only served to harden opposition in Conservative circles against her, precipitating her announcement that she would make way for a new leader.