Surely the price should have moved out much more?

As we end the parliamentary year I thought it would be useful to look at how punters have seen the next general election since the market was opened just after the last one in May 2005. The chart tracks the betting prices on “who will win most seats” expressed as an implied probability.

The remarkable thing, given all the gloom and doom about Labour’s prospects from the Westminster village, is how well the party’s price is holding up. In fact it is only in the past two months the Labour has moved to a position that was worse than what you could have got on the Tories as they started their conference in Blackpool last autumn.

A great thing about looking at a betting trend like this is that it shows the collective view of those who have been prepared to back up their predictions with hard cash. This is unlike the “panel of experts” that PoliticsHome uses.

If you wanted to bet £100 that Brown’s party would come out on top then the most profit you could get on a successful wager would be just £285 – which doesn’t seem a lot given the unprecedented turnaround in the opinion polls that would be required

I know all about the inbuilt advantages that the electoral system is supposed to give Labour when it comes to the seats-votes ratio but even then the price is remarkably tight.

Who are these people, you wonder, who are prepared to take the risk for what seems a small return?

This is not a form of betting I get into because even if you have predicted the trends right you have to wait until the election itself before you have any hope of realising your winnings. This is unlike the spread betting markets where you can close down a position at almost any time and realise a profit immediately.

Mike Smithson