Where next for the troubled Tories?

If the markets are to believed, the uncertainty and speculation will soon be over. The Next Government is rated 92% likely to be a Conservative Minority with Theresa May a 94% chance to be Prime Minister of it. Whether, after five massive political betting upsets in the space of two years, you regard betting markets as a reliable predictor, is another matter.

Anyone who tells you they know even Britain’s immediate political future is delusional. We are in unchartered territory and everyone is still trying to make sense of last week’s result. However basic maths means it is hard to see any other eventuality than a minority Tory government. Between them, Labour and all other CON/DUP alternatives simply don’t have the numbers.

Yes, there are big problems with forging a DUP deal, as Sir John Major outlined yesterday. But this isn’t a coalition or anything resembling one. It is unlikely to compel either side to much beyond the short-term votes that will allow May to form a government. We should assume the Queens Speech vote will be passed next week and look ahead to the profound implications.

How long can this precarious arrangement last?

The short answer is not very long. At odds of 3.5, our market rates a Second Election in 2017 only 28% likely but we are bound to at least hear plenty of speculation. Any links with the DUP are a problem for liberal conservatives and there are plenty of policy disagreements between the parties anyway. This can only be a limited, short-term affair in response to a national crisis.

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