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British Prime Minister Promises to Resign by September

British Prime Minister Gordon Brown says he will resign by September. Observers say the decision eases the way for his Labor Party to stay in power in a possible coalition government, following last week's indecisive election.

No party won a majority in the House of Commons in last week's British elections and Labor Party leader and Prime Minister Gordon Brown says because of that, he plans to resign later this year.

"The reason that we have a hung parliament is that no single party and no single leader was able to win the full support of the country," said Gordon Brown. "As leader of my party, I must accept that is a judgment on me. I therefore intend to ask the Labor Party to set in train the process for its own leadership election."

He hopes a new leader will be in place by mid-September.

"I have no desire to stay in my position longer than is needed to ensure the path to economic growth is assured and the process of political reform we have agreed moves forward quickly," he said.

Right now, he will try to remain prime minister by forming a coalition government with the Liberal Democrat Party headed by Nick Clegg.

"Mr. Clegg has just informed me that while he intends to continue his dialogue that he has begun with the Conservatives, he now wishes also to take forward formal discussions with the Labor Party," said Prime Minister Brown.

The prime minister is already saying things the Liberal Democrats want to hear.

"The first priority should be an agreed deficit-reduction plan to support economic growth, and a return to full employment," he said.

Analysts say the Liberal Democrat Party has more in common with Labor than with the Conservatives, but the deal is far from done and the Conservatives could still come to power. Alongside his resignation announcement, Mr. Brown sounded as though he were still campaigning.

"I believe that the British people now want us to focus on the economy, the continuing fight against terrorism, the terrorist threat to our country, they want us to pursue the economic recovery and I will do so with my usual vigor and determination," said Gordon Brown.

Analyst Tim Hughes, of the financial services company IG Markets, says trading markets are watching closely what the politicians decide.

"Whoever leads the country needs to get sufficient backing in the Commons to get decisions made and get things done, and if that happens then that will secure the confidence of the market," said Tim Hughes.

Economists say a stable government is key to a healthy economy, because financial markets do not like uncertainty.