Theresa May survives for now but can she last the year?

After an unforgettable day of political drama, Betfair markets were downgrading the likelihood of Theresa May being imminently forced out of office but her position remains perilous. The Prime Minister is rated 42% likely to leave office this year at odds of 2.4. In our tri-monthly market, July-Sept is trading at 3.5 (28%) down, from around 8.0 over the weekend. Earlier in the day, however, both markets had traded odds-on, down to 1.61 and 1.88 respectively.

As Max Liu reported yesterday, the betting exploded into life late Sunday after David Davis’ resignation, to be followed later by Boris Johnson. As May dealt with a largely hostile and even derisory Commons, Sky News ran a split-screen with footage of Foreign Secretary’s official residence, avidly awaiting Johnson’s resignation statement.

No imminent challenge leaves May safe for now

That seemed a moment of maximum peril but, as the subsequent market drift implies, there remains no indication of an imminent confidence vote or leadership challenge. None of the resigning Ministers called for May to go and other prominent Brexiteers like Jacob Rees Mogg were quick to reaffirm that they were after a change in policy, not PM. Later, she reportedly survived a meeting of the backbench 1922 Committee unscathed. Betfair Sportsbook is now offering 5/6 about a Conservative leadership contest this year.

Predictably, Number Ten were adamant that she would fight any challenge and that is probably enough to deter rebel MPs, for now. They don’t have the numbers to force her out yet, or a <strong>challenger in-waiting</strong>. However none of these internal party machinations do anything to resolve the fundamental problem. Their belatedly agreed Brexit negotiating position – constantly over-billed as a ‘deal’ – is doomed. Cabinet unity took all but 48 hours to disintegrate, further parliamentary defeats look likely and much of it is unacceptable to the EU.

Grassroots dismay leaves the PM extremely vulnerable

If Tories and Brexiters among the wider public didn’t like the Chequers proposals – weekend polls showed confidence in her Brexit deal-making ability at a new low, while 56% of Tory members want her to stand down within a year – they will hate the eventual, watered-down deal that emerges. Talk of betrayal is already in the air from MPs, activists and the Brexit media. A narrative is building that, whatever emerges, it will be “Brexit in name only.”

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