Trump ally Nigel Farage's return could be an 'extinction event' for the Conservatives ahead of UK election

LONDON — The shock return of Brexit figurehead Nigel Farage to the political fray could be the final nail in the coffin for Prime Minister Rishi Sunak's ruling Conservative Party ahead of its almost certain defeat in the upcoming U.K. elections.

Farage announced Monday that he would run in the U.K.'s July 4 election, less than two weeks after saying he would not stand as a parliamentary candidate to focus on supporting his friend and ally Donald Trump in the U.S. presidential race.

Euro-skeptic Farage said he will lead his right-wing Reform UK party — formerly known as the Brexit Party — and run for a seat in Clacton, a coastal town in the east of England, which saw huge support for the Leave campaign he orchestrated in the 2016 EU referendum.

The politician-turned-media personality's return adds momentum to the insurgent party. But, critically, it threatens to deprive key votes from the Conservatives, who are already trailing opposition Labour in the polls by a dramatic margin.

"Even if Reform don't win seats, they'll drain key votes away from the Conservatives," Olivia O'Sullivan, director of Chatham House's U.K. in the World programme, told CNBC over the phone.

The latest modeling, released moments after Farage's announcement, puts Labour on for an historic victory — greater even than Tony Blair's 1997 landslide — with the party gaining 220 seats to the Conservative's 225 losses. That would put Labour leader Keir Starmer on for a 422-seat majority in the 650-seat House of Commons.

Farage acknowledged Monday that Labour effectively had the election in the bag, but he said he felt he would be "betraying" voters if he did not offer them a viable right-wing option.

Tony Travers, professor at the London School of Economics, said