Based on current polls the betting markets are understating Labour’s chances of an overall majority
A hung parliament should not be favourite
Betfair’s next general election overall majority market was set up a couple of months after May 2010 and in the early period the price on a CON majority soared to 40%+.
Then it went into a decline and in the aftermath of Osborne’s March 2012 budget dropped to a 16% chance. In the summer of 2013 when all the pressure appeared to be on EdM and 3 polls reported that the parties were level pegging Conservative majority prospects were rated at a 25% chance.
Since then it has edged down and now is trading at just over 21%. The LAB price was over 40% for quite a long time but now has edged down a couple of notches.
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To my mind the current CON majority level is far too high, particularly given the failure of the boundary change plan. Currently I rate a LAB majority as the most likely outcome.
Remember that the way the LAB vote is distributed means that it can win an overall majority with a lead of 1-2%. Some argue that Ed could have a working majority even if Labour’s national vote share simply equals the CON one.
Many have pointed out the disparity between this national betting and what is available on the specific constituency markets. Essentially, if you want to bet on a CON majority you’ll do better going for specific seats. Conversely the national market offers the best value for a LAB majority.