Could the hype shift the General Election markets?

David Cameron’s progress in the past eight days has been staggering and although hurdles remain his political-savvy campaign team are going to do everything they can not to let the current opportunity go. If he does succeed Michael Howard then he’ll be the first party leader ever to have had a background in public relations before entering parliament – a fact not without significance.

His day job in the years before the 2001 General Election was as PR boss for what was then Carlton Television and his expertise is showing in the current campaign. He’s liked by journalists because as well as being “new” and good-looking a large part of his professional life has been spent working at the front line with people like them and he knows what he’s doing in this arena.

On August 1st I wrote here“…This guy is a communications professional and we think that this will help him enormously if the Tory party reject the Howard rule changes and stick with the system of the final leadership say being with the party membership at large. From a betting standpoint we think he will have a good party conference and his price will tighten the closer it gets to decision time… there could be money to be made on the spread and exchange markets as the Cameron price tightens, as we think it will, in the run-up to the final decsion.”

Expect to see an extraordinary media love-in with Cameron in the run-up to leadership election result and thereafter if he does win. Within a short period, I believe, “expert commentators” will be suggesting that the Tories might just stand a chance at the next General Election. The idea that Labour might be beaten will start to emerge.

And this is where there might be a profit opportunity. My guess is that the betting exchange and spread markets could see a shift from Labour to the Tories on the outcome of the next General Election. There are many Tories who want to believe and prices could move.

And because in both these forms of betting you can usually close down a position at any time there might be short-term money to be made betting against Labour only to move out when the price has moved. Bear in mind that with both the Betfair exchange and IG’s BinaryBet the outcome is on “which party will win most seats” – not on whether there will be an overall majority.

I am certainly not making a prediction about the next General Election – but I believe the media-hype that we are already seeing about the whole political environment changing could cause a shift which might offer a chance to make a profit.

At time of posting Betfair had 0.54/1 to 0.57/1 on Labour being top party. The IG’s BinaryBet Labour spread was 60-66. I’ve just “sold” Labour at 60.

A DATE FOR YOUR DIARY We are planning to hold a New Year PB.C party in London on Saturday January 14th 2006. Philip Gould, the leading Labour pollster, made a donation to the last PB.C party which was not, in the end, needed. This will help us cover the core costs of the get-together.

Mike Smithson