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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

British Pound Soars on Exit Poll Conservative Election Win

ElectionOracle / British Pound May 07, 2015 - 11:11 PM GMT

By: Nadeem_Walayat

ElectionOracle

The British Pound has soared following the release of the Exit Poll that forecast a defacto Conservative election win on 316 seats as part of a coalition with either the Lib Dems (10) or the DUP (8). Sterling currently stands at £/$1.5415 against the U.S. Dollar, lifting the GBP towards the upper end of its recent range and indicates to expect a similar surge for other markets such as stocks and bonds on tomorrows open.


Sterling's strength is indicative of the positive trend of virtually all of the financial markets from stocks, bonds, and housing market for the duration of the election campaign that as my recent article suggested strongly indicated that the Conservative would win the election.

06 May 2015 - Stocks, Bonds, Sterling and House Prices Forecast Conservative UK Election Win

"Its the Economy Stupid" - And of course stable markets are just reflective of a relatively strong UK economy which 'should' favour the party of Government.

So Britain's calm financial markets and relatively strong economy are painting a picture for the continuation of the Conservative government be it in Coalition with the Lib-Dems or not.

Exit Poll and Opinion Pollster Seat Forecasts

Here are the results of the exit polls, my forecast as of 28th Feb, and the last opinion pollsters seats forecasts.
Market Oracle May2015 .com Electoralcalculus .co.uk ElectionForecast .co.uk The Guardian Exit Poll
 

28th Feb

7th May 6th May 7th May 7th May 7th May
Conservative 296 273 281 278 273 316
Labour 262 268 276 267 273 239
SNP 35 56 52 53 52 58
Lib Dem 30 28 18 27 27 10
UKIP 5 2 1 1 3 2
Others 22 23 22 23 22 24


The exit polls if accurate imply :

Conservatives + Lib Dems = 326 - SUCCESS

Conservatives + DUP 8 seats = 324 -SUCCESS

Labour + Lib-Dems = 249 - FAIL

Labour + Lib-Dems + Plaid Cymru + Greens + SNP = 313 - FAIL

Therefore the Conservatives have won the 2015 General Election. Though remember the exit poll is based on only 22,000 people.

Whilst the opinion pollster's seats forecasts average to:

  • Conservatives : 276
  • Labour : 271
  • SNP : 53
  • Lib Dems : 25
  • DUP 8

Where if instead the opinion polls prove to be correct then the UK is heading for an extreme hung parliament where -

Conservatives + Lib Dems = 301 - FAIL

Add DUP 8 seats = 309 - FAIL

Labour + Lib-Dems = 296 - FAIL

Labour + Lib-Dems + Plaid Cymru + Greens = 303 - FAIL

Thus according to the opinion polls the only workable majority would be one of a minority Labour government that is supported by the SNP (53) to total 323. Which compares against my long standing forecast conclusion as of 28th Feb which is primarily based on economic and market analysis rather than opinion polls:

UK General Election May 2015 Forecast Conclusion

My forecast conclusion is for the Conservatives to win 296 seats at the May 7th general election, Labour 2nd on 262 seats, with the full seats per political party breakdown as follows:

Therefore the most probable outcome is for a continuation of the ConDem Coalition government on 326 seats (296+30) where any shortfall would likely find support from the DUP's 8 seats.

The alternative is for a truly messy Lab-Lib SNP supported chaotic government on 327 seats (262+30+35) which in my opinion would be a truly disastrous outcome for Britain, nearly as bad as if Scotland had voted for independence last September.

Another possibility is that should the Conservatives do better than forecast i.e. secure over 300 seats but still fail to win an overall majority, then they may chose to go it alone with the plan to work towards winning a May 2016 general election.

The bottom line is that the opinion polls do not reflect how people will actually vote on May 7th when they are faced with a stark choice of steady as she goes ConDem government or take a huge gamble on Ed Milliband's Labour party. So in my opinion several millions of voters will chose to play it safe with ConDem which thus is the most probable outcome.

Also available a youtube video version of my forecast:

And the most recent iteration in this video analysis:

The exit polls precisely in line with my long-standing forecast as of Feb 28th for the continuation of a Conservative led government on 326 seats. Therefore virtually all of the pollsters have have eggs on their faces as the mainstream media has flushed untold millions down the drain on commissioning opinion polls that turned out to be WRONG just as the polls were wrong in the run up to the Scottish referendum that was never a 50/50 proposition which at the time I concluded was mainly so as to allow pollsters to sell opinion polls and the mainstream press to sell copy and so it has been for the 2015 election campaign.

UK Saved From I.S. Threat But Scottish Independence Nightmare is Not Over!

There is another reason as well for why the polls were so close and that is one of SALES, the polling industry SELLING a tight election so that the gullible mainstream press would buy their polling services. Therefore painting a picture of a tight race by manipulating the data will have turned out to be a huge money spinner for the polling agencies.

My article concluded in the most probable forecast for the outcome of the result would be for at least show a 10% gap between NO and YES, and definitely not reflective of the mass hysteria.

Therefore the most probable outcome is inline with the polling ranges of before the YES campaigns intimidation and fear phase began to play a prominent role in the frenzy of campaigning of September that rather than a 50/50 tight race is more probably going to result in at least a 55% NO vote victory, and I would not be surprised if the NO vote even breaks above 60%!

Instead the most accurate indicator as illustrated at length by my 60 or so articles and 8 videos on the election campaign this year has been my UK house prices to seats analysis as of December 2013 which on the most recent data implied that the Conservatives would win the election with a single digits outright majority -

01 May 2015 - UK Election Forecast 2015 - Who Will Win?

Implications for Election 2015

Momentum has picked up from February's +6.6%, to +7.7% for March, though has missed the headline grabbing new all time high in average UK house prices just prior to election day, probably due to ongoing weakness in house prices in the South East.

Therefore the Conservatives mini election boom appears to have failed to spike to a +10% inflation rate for election day, where my expectations were that it could have ranged to as high as +12% for an outright majority 30 seats inducing result as my long-standing analysis of seats vs house prices trend trajectory forecast.

16 Dec 2013 - UK General Election Forecast 2015, Who Will Win, Coalition, Conservative or Labour?

The following graph attempts to fine tune the outcome of the next general election by utilising the more conservative current house prices momentum of 8.5% which has many implications for strategies that political parties may be entertaining to skew the election results in their favour.

The updated election seats trend graph suggests that the Conservatives are on target towards achieving a single digits outright majority which is completely contrary to every opinion poll published this year. Which if it materialises then I am sure for Election 2020 everyone will be staring at the house prices indices rather than the opinion polls. Though as is usually the case that when the consensus becomes focused on an particular indicator then it usually stops working.

Ensure you are subscribed to my always free newsletter for continuing in-depth analysis and concluding trend forecasts.

Source and Comments: http://www.marketoracle.co.uk/Article50580.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2015 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 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 focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 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

zahlen2k
08 May 15, 01:11
Good Call

Looks like you were right about opinion polls being wrong. Great analysis as always.

Cheers

Zahir


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