Brown’s price eases from 0.23/1 to o.4/1

As the chart shows the implied probability of Gordon Brown succeeding Tony Blair, based on the best betting price, has moved sharply since the high-spot of the Chancellor’s speech at the Brighton conference just a month ago.

Although this is a very light market with little liquidity it is clear that there the near certainty that last month’s 0.23/1 Brown price suggested has been affected by what has been going on in the Tory party and the prospect of a Cameron leadership.

The Observer’s chief political correspondent, Ned Temko, is reporting this morning that “…David Cameron’s emergence as favourite to win the Tory leadership raised fresh questions about Labour’s succession battle yesterday, with members of Tony Blair’s circle suggesting that Gordon Brown could have a tough time beating a much younger and more media-friendly foe.”

Temko goes on to note that the William Hill price against David Miliband as next Labour leader has been cut from 50/1 to 25/1. We think it is dangerous to attach too much significance to such a movement.

In very light markets it can be distorting to focus on the price from one bookmaker and you get a better picture if, as we do, you look at the best price that is available from a range of bookmakers and betting exchanges over a period.

The Betfair betting exchange has seen just £22,555 worth of matched bets in this market, more than 90% on Brown, of which a total of only £203 has been on Miliband. And although there has been a move to Miliband he is still not at the high point of 5/1 against being leader that he reached on that market in early June. That information would, perhaps, have taken the edge off the Temko report.

With many parts of the media now following PB.C in attaching importance to betting price changes it is important that it is done properly.

Mike Smithson