For those like myself, wanting a progressive alliance resulting in significant electoral reform and PR, these results look ideal.
Starmer will know the surest way of getting the Tories out is an alliance. He faces internal opposition from the old guard, particularly on the Left, who believe their way is the only way to organise society and govern. Compromise doesn't come easily to them.
If it looks too much like Labour could win an decent overall majority, they will dig in and risk that they can win anyway. Under FPTP and with the boundary changes, I don't think they can. Local elections are not to be relied on, but some foolhardy Labour wishful thinkers will.
The best thing, the safest option, is to make the alliance. In return for PR, which is fairer anyway, it should be possible for the Lib-Dems, Greens and maybe some nationalist parties to agree on some left leaning measures and reforms.
At the same time this would ensure we can't again have a situation we have now. Right now we have a Party whose funding is opaque and open to compromise and corruption to wealthy foreign actors who don't even pay tax in this country. Whose membership is largely made up of one narrow demographic of the population and has such a small membership that a relatively small number of ukippers with quite extreme social views can impose it's will on the selection and deselection of MP's, which it has formed into an influential kingmaking Party within the Party. It is able to form an unassailable majority in Parliament so that it cannot be held to account and has the shamelessness and lack of respect to ignore the rules and conventions which are, it turns out, the only things holding our most important democratic institution together.