If Tony Blair is to be forced from office by the result of an election then the one that takes place in the US on November 2 is likely to have a bigger impact than coming third behind the Lib Dems in this year’s local polls.

Certainly Thursday’s drubbing will provide further fuel for those in the Labour party who want him out. And, of course, there have been the rumours for months that at the famous Admiralty Arch dinner with John Prescott, Tony Blair and Gordon Brown in November a deal was done whereby Blair would leave after his 10th Anniversary as leader in July.

But Tony Blair’s actions have not looked like those of a man looking forward to an early retirement. His controversial but strategically brilliant move agreeing to the Euro referendum in April has really taken the edge of the Tory threat and has left Michael Howard without the anti-European rhetoric to deflect the continuing differences over the EU within the Conservative Party.

But how will Tony Blair’s future look if in the US Presidential election George W. Bush is defeated at the hands of John Kerry? If ever there was an argument for demonstrating to MPs that going into the Iraq war was committing electoral suicide then this would be it.

And while all the focus in the UK has been on the elections here Bush has found it almost impossible to shake the Kerry threat off in the polls. We’ve written here before of the huge benefit that the Kerry campaign would get from having the Republican Senator, John McCain, in a bi-partisan ticket and when we suggested that readers should take the 14-1 that was being offered on this possiblity the bookmaker involved got out of the market completely.

Meanwhile the UK General Election markets have moved slightly Labour. There’s a bit more pressure on Blair and the US election market continues to offer reasonable value on John Kerry although price have slipped.

As we said yesterday we think that Charles Kennedy’s position is now secure and this should be reflected in the Party Leaders market.

UPDATE COMMONS SEATS SPREAD BETTING

LAB 323-333 (-5)
CON 243-253 (+3)
LIB 55-60 (+2)

So from the above political gamblers see Thursday’s results as being better for Labour than the Tories. Our General Election CALL remains – we think that Labour will be the top party. We are not as convinced with the spread market view that Thursday was better for Labour than the Tories.