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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

U.K. General Election Exit Poll Result Does Not Make Any Sense

ElectionOracle / UK General Election May 06, 2010 - 04:17 PM GMT

By: Nadeem_Walayat

ElectionOracle

Best Financial Markets Analysis ArticleThe BBC / SKY / ITV election exit poll released as the polls closed at 10pm, projects for a hung parliament with the Conservatives in front on 307 seats, Labour second on 255 seats and Liberal Democrats third on 59 seats.


The exit poll does not many any sense as it forecasts that the Liberal Democrats will actually LOSE 3 seats against the 2005 election when according to opinion polls their % share has jumped by 6%, which should result in the Liberal Democrats being on between 70 and 80 seats. Therefore it is highly likely that this exit poll will turn out to be highly inaccurate, especially in terms of the Liberal Democrat seats.

Tuesday analysis - (04 May 2010 - U.K. General Election Forecast 2010, Hung Parliament or Conservative Win ? )

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.

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.

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.

The exit poll is inline with my Conservative and Labour forecast ranges but the Liberal Democrat seats is not right. In probability the Liberal Democrats should be able to achieve at least 10 more seats, and also the Labour Conservative seats could be 10 seats. Therefore the election outcome could still result in a surprising outcome of who becomes the next government.

Exit Poll Projection Adjustment

  • Conservative from 307 to 310
  • Labour From 255 to 240
  • LIberal Democrats from 59 to 71

The first results should start to follow in about 30 minutes time. With 200 seats to be expected to be declared by 2am (3hours 45mins).

An exciting and tight election night that follows on from an even more wild and exciting last hour of trading on wall street!

Source: http://www.marketoracle.co.uk/Article19251.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.

Nadeem Walayat Archive

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


Comments

Andrew MCKILLOP
07 May 10, 12:26
HUNG PARLIAMENT - DRAWN AND QUARTERED BUDGET

Markets will not take long to treat a hung parliament UK like Lehman Bros. UK national finances are the natural target for speculative nudging when the Greek panic is smothered by easy printed Euros. These have at least a 50/50 chance of staying overvalued, if that means better than 1 USD, but the GB pound already had its chance and blew it.

1 Euro can equal 1 GBP rather easily, with a hung parliament

The problems for the post-Brown UK include its low credibility Mint or government printing press, and the short countdown for market nudging to shift to naked political prodding

The market message is simple: Whoever wins has to join the Eurozone debt party. No more going it alone Brit style !

Which UK political leader is going to say that first ?


sixpack
07 May 10, 13:04
exit polls

amazing how close the exit polls were! looks like voters were either told "vote Clegg, get Brown" or "Vote Clegg, get Cameron" - hence this would have turned a lot of people off voting Clegg as they wanted to either get rid of brown or stop Cameron.

So this unique bi-polar attitude of the electorate was the undoing of the lib-dems but almost any other background (eg stronger tories) would have translated into lib-dem gains. Or perhaps its not unique, and means a 3rd party is never going to stand a chance given the tactical voting working on both sides.

Interesting question for me: did people vote Cameron cos they really disliked Brown or cos the IHT bribe was too good to turn down? Apparently it benefits 4 million people with parents in the more valuable homes esp in the South where house values are much higher.

There's no doubt that while Brown appears competent he definitely lacked voter appeal and that's what cost, otherwise the Tories would have struggled to get their very modest 48 seat lead over labour - its easy to see labour getting another 24 seats with a fresher leader.

It's very UK - you can be plain and un-spectacular and boring/unimaginative (eg Tim Henman), and that's ok, but you can't be different, socially clumsy like Brown and not look middle class. They won't buy it.


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