How far can Labour’s comeback go?

It remains a longshot, but in 12 days time the political prediction industry could be in meltdown. Donald Trump may have produced the biggest upset of all-time but even that shock would pale into insignificance compared to Jeremy Corbyn becoming Prime Minister. Three weeks ago that eventuality was rated less than 3% likely on our market but this morning Corbyn’s odds are down to 10.0 or 10% – around the same that were available about Trump on election night.

Labour’s polling improvement has been rapid and remarkable by recent campaign standards. At the start, they were regularly 20% behind. In two of today’s five polls, the deficit is no more than 7% – the average is 10%. Equally, Corbyn has made significant inroads into a huge deficit with Theresa May in both approval and best PM ratings.

Labour continue to improve across Betfair markets

Naturally, the betting impact has been significant, particularly on side markets. For example Labour Vote Percentage has been transformed. From a peak of 12.5, 30.01-35% is now rated five times likelier at 2.5, while 35.01%-40% has shortened from 100.0 to just 4.0. Their odds on winning Over 177.5 Seatsadvised earlier at 3.5 – is now a decent shade of odds-on at 1.7.

Such minor targets, of course, remain well short of success – 178 seats would represent a net loss of 54. In order to win Most Seats, they must overhaul a 99 seat deficit. Psephologists predict that Labour would need a lead of nearly 4% to be the largest party and over 12% for an Overall Majority.

Nevertheless at this rate of improvement, Labour at least retain realistic hope of a hung parliament. Narrowing the gap to 4% would probably achieve that and there’s no question they are winning the campaign. As predicted, their manifesto provided a big boost and Corbyn has defied low expectations. Entering the closing stretch, everything is still to play for.

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