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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

U.K. General Election Forecast 2010, Hung Parliament or Conservative Win ?

ElectionOracle / UK General Election May 04, 2010 - 05:32 PM GMT

By: Nadeem_Walayat

ElectionOracle

Best Financial Markets Analysis ArticleThe mainstream press obsesses over national opinion polls that are clearly suggestive of hung parliament that typically places Conservatives on 35%, and both Labour and the Liberal Democrats on 28% which translates into a decidedly hung parliament. The Conservatives to win outright typically need a swing from Labour to Conservatives of at least 7% to reach 39/40%, instead they are only achieving a 5% swing nationally.


Gordon Brown and Senior Labour Officials Promote Tactical Voting to Keep Tories Out

Senior Labour party officials including Tessa Jowell, Peter Hain and Edd Balls called on Liberal Democrat and Labour voters to vote tactically to keep the Conservatives out.

Gordon Brown Stated : "Look at the Constituency in which you are in and find out that the contest is between Labour and the Conservatives and don't allow a Liberal vote by chance to put a Conservative candidate in."

Tessa Jowell: If you are some body who fears the prospects of a Tory government they the Daily Mirror have told you in certain parts of the country how you can use your vote (referring to the Daily Mirror guide to tactical voting).

Peter Hain: I think it's important for people to act intelligently in this election. It was in the 100 or so Labour-Conservative battlegrounds where it would be decided which party won a majority - and the two parties were "very close together in the number of seats - that is to say the number of MP's in the next Parliament". He urged Lib Dems, Greens and Plaid Cymru supporters to back Labour.

Edd Balls: "I always want the Labour candidate to win, but I recognise there's an issue in places like North Norfolk, where my family live, where (Lib Dem) Norman Lamb is fighting the Tories, who are in second place. And I want to keep the Tories out."

Tactical voting by third positioned party voters to keep their most disliked party out of power which implies an overall boost for Labour as Liberal Democrats in close Labour / Conservative election battles would be expected to vote to keep out Conservative MP's. Reuters in a survey of marginal constituencies over the weekend revealed that only 1 in 10 voters will consider voting tactically, which could influence the outcome of at least 40 seats. Off course not all Liberal Democrats would vote for Labour to keep out a Conservative MP therefore the impact of tactical voting comes down to a constituency by constituency basis.

My long standing and unchanged UK Election forecast as of June 2009 is (02 Jun 2009 - UK General Election Forecast 2010, Seats Per Political Party)

The general election forecast is for 225 seats for Labour and 343 seats for the Conservatives which implies a Tory government with a much smaller majority of 36 than the 192 being bandied about in the mainstream press this week, which would mean that the next Conservative government will not be able to implement many of the more radical reforms necessary to restructure the economy in terms of deep cuts in public spending and therefore suggests a weaker government that could by mid-term at the the mercy of rebel euro-skeptic MP's much as John Majors government of 1992 to 1997 experienced. This is potentially bad news for the economy as it confirms my expectations of continued stagnation for most of the term of the next government i.e. low average growth coupled with above average inflation as a consequence of not being able to mend countries finances which is likely to continue to see large year on year budget deficits and therefore achieves the Labour parties strategy of delivering a scorched earth economy to a Conservatives one term crippled government, that sows the seeds for a landslide Labour victory come the 2014-2015 election.

The latest average of opinion polls as tracked by the Sunday Telegraph puts the Conservatives on 35%, Labour on 28% and Liberal Democrats on 28%.

According to the BBC Election Seat Calculator the above poll would translate into Conservatives on 277 seats, Labour on 262 and Liberal Democrats on 82 seats, therefore a hung parliament.

However the mainstream press and opinion poll projections including the BBC seat calculator repeatedly fail to recognise that only the 140 or so of marginal constituencies count, therefore focusing and making projections based on the national share of the vote is not as accurate as the individual marginal constituency swings which typically are achieving the 7% needed for the Conservatives to win, thus the official polls grossly under-estimate the number of seats that the Conservatives are likely to win.

UK General Election Revised Forecast

Considering a string of marginal constituencies that are showing a swing from Labour to Conservatives of the 7% needed to win, however also adjusting for the fact that the Conservatives will also lose some seats the Liberal Democrats due to their poll surge. Therefore my revised forecast for the May 2010 General Election is for the Conservatives to be the largest party on between 305 and 325 seats, Labour second on between 240 and 260 seats and Liberal Democrats third on between 70 and 80 seats. Which suggests on the Conservatives best outcome they will just fail to secure an overall majority by as little as 1 seat, which also implies that the Conservatives could decide to govern as a minority government.

Also of interest is that the combined Labour / Liberal forecast range is 310 to 340 seats, so of the Conservatives manage to get towards the upper end of their forecast range, then the combined Labour / Lib-Dem total could also just fail to secure an overall majority which truly would result in a remarkably hung parliament.

Source: http://www.marketoracle.co.uk/Article19192.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on UK inflation, economy, interest rates and the housing market and he is the author of the NEW Inflation Mega-Trend ebook that can be downloaded for Free. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 500 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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