But if not the Chancellor who?

With Gordon Brown continuing to be the heavy odds-on favourite in the Next Labour leader market anything that might hurt his chances has to be taken seriously. And today, in one of those front page splashes that have becoming a characteristic of the Independent in its tabloid form, the paper pulls together a series of economic indicators to question whether the UK might be in trouble.

Philip Thornton, Economics Editor, notes ……mounting concern that after eight years of stability under Labour, the UK faces the prospect of a sharp economic slowdown. Within days of Labour’s election celebrations, the economy has started to look very sick. Last week saw a rash of shockingly bad figures pointing to a slump in retail sales and manufacturing output and stagnation in the housing market. Several high-street names warned that sales had fallen and profits would be hit. The Bank of England admitted it had been “surprised” by the speed of the high-street slowdown. Labour campaigned on its record of strong, stable growth and low inflation, but economists in the City are queuing up to cut their growth forecasts for this year. …The Government’s economic record was a key part of the election campaign that was immune to the attacks on Labour over issues such as Iraq. It was also seen as Gordon Brown’s credentials for taking over as Labour leader when Tony Blair finally steps down as Prime Minister.

We’ve always been sceptical of those who’ve regarded Brown as a certainty to take over from Tony Blair and certainly the current betting return is far less than the risk, particularly as you could be waiting for years to unlock your stake and collect your small winnings.

But do the current economic worries mean that there might be value in one of the other candidates? The conventional bookies make Charles Clark the second favourite at 11/2 while the current Betfair price on the Home Secretary is 45/1 – a huge difference which is seen right down the list of other potential candidates on the betting exchange.

Another thought is that if the economy is starting to create problems could this be an opening for the 33 year old George Osborne in the Next Tory leader market. As Shadow Chancellor Brown’s difficulties could provide a platform for him to shine. His conventional bookie price is 7/1 but you can get nearly twice the potential return with Betfair.

SPENDING MY GENERAL ELECTION WINNINGS I am off on holiday for a few days so unless anything remarkable happens the next article by me will not be until Sunday.

Mike Smithson