But why aren’t the markets moving in his direction?

After the success of yesterday’s elections in Iraq can Tony Blair now draw a line under the war and its aftermath and start to relish in what some have described as his “Bagdhad Bounce”?

For if there had been any doubt at all about whether he will be returned with another huge majority it has been over his decision to take the country into the war without UN sanction and against huge opposition both within his party and throughout the country.

The war and its associated issues like the Andrew Gilligan interview, the Kelly suicide and the Hutton and Butler inquiries have taken their toll on the Prime Minister, particularly on the level of trust he enjoys from the British public. Labour has hardly been out of the 30s in the opinion polls and the only consolation the party has had is that the Tories have been doing even worse.

Can we expect Labour to climb into the comfortable poll positions that they had at this time before the last election – or is there still a worry for Tony Blair?

Will the fact that Iraq is now on the road to democracy secure, for certain, an unprecedented Labour third term with a huge majority?

So far the markets have been unimpressed. In spite of yesterday’s three new opinion polls all showing Labour well ahead and the news from Iraq the moves on the spread-betting markets have been in the opposite direction. It’s the Tory price, not Labour’s that has progressed today – something that we did not predict and cannot explain.

Latest IG Index spread prices: LAB 355-362 (nc): CON 190-197 (+1): LDs 70-74 (nc)

Mike Smithson