Is Labour set to lose its overall majority in 2009?
Even though we are probably four years away from the next UK General Election betting has already started although few punters seem to have been tempted to lock up their money so far ahead.
So the current market view, and this is based on a very small amount of betting, is that Labour is set to lose its overall majority but still have a comfortable margin on seats.
With both Labour and the Tories almost certain to be fighting the election under new leaders it’s a bold punter who is shelling out now. None of the prices available seems attractive. Unless the new Tory leader can produce a massive change in the political climate, and this is diffifcult to envisage, we find it hard to argue with the markets.
Clearly a major element will be the economy and with the latest UK growth not being as large as expected this might have a big impact. But four years is a long time in politics.